FRED // M2SL

M2 Money Supply Stock (Seasonally Adjusted)

LIQUIDITY Monthly

OBSERVATION DATE: 2026-09-01 • UNIT: $B

LATEST OBSERVATION

23413.9 $B

PRIOR / PERIOD Δ

23300.9 (+ 113.00)

YOY CHANGE

+ 5.71 $B

M2SL // M2 Money Supply Stock (Seasonally Adjusted) ($B)1Y: +1264.70 (+5.7%)

2026-09-01OBSERVATION: 23,413.9 ($B)

11 S&P 500 GICS SECTOR PEARSON CORRELATION MATRIX VS. M2SL SORTED TAILWIND (+r) ──► HEADWIND (-r)

ETF	GICS SECTOR	PEARSON r	R²	BETA / REGIME TRANSMISSION
XLRE	Real Estate	+0.26 r	7%	[+3.92% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLF	Financials	+0.24 r	6%	[+3.45% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLP	Consumer Staples	+0.14 r	2%	[+1.54% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLI	Industrials	+0.14 r	2%	[+1.99% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLK	Technology	+0.14 r	2%	[+2.65% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLB	Materials	+0.11 r	1%	[+1.67% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLY	Consumer Discretionary	+0.11 r	1%	[+1.89% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLV	Health Care	+0.10 r	1%	[+1.15% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLU	Utilities	+0.09 r	1%	[+1.29% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLE	Energy	+0.08 r	1%	[+1.62% per +1% delta] Modest pro-cyclical beta benefit on rising M2SL
XLC	Communication Services	+0.07 r	1%	[+1.1% per +1% delta] Low-beta regime neutral across 5Y M2SL cycle (258W)

AI MACRO REGIME IMPACT BRIEF ACCOMMODATIVE

M2 LIQUIDITY SURGES TO RECORD 23413.9 $B: SYSTEMIC EXPANSION FUELS PRO-CYCLICAL ASSET RE-RATING

Seasonally adjusted M2 money supply advanced by +113.000 $B sequentially to print at a fresh 52-observation high of 23413.9 $B (up from 23300.9 $B prior, with YoY expansion at +5.71 $B), confirming broad-spectrum balance sheet and deposit creation re-acceleration. This structural injection of liquidity compresses aggregate cost-of-capital, loosening financial conditions and supporting equity multiples across high-beta segments. As bank deposit growth and credit aggregates clear friction points, cross-asset discount rates soften, disproportionately benefiting balance-sheet-heavy and rate-sensitive structures over defensive defensive cash proxies.

▲ REGIME TAILWIND SECTORS

XLRE // Real Estate

XLRE exhibits the highest positive correlation (Pearson r = +0.26, R² = 0.07) and outsized beta sensitivity of +3.92% per +1% change in M2SL. Broad liquidity expansion drives down credit spreads and cap rates, unlocking refinancing pipelines and asset revaluation.

XLF // Financials

Posting a strong positive correlation (Pearson r = +0.24, R² = 0.06) with a +3.45% beta sensitivity, XLF capitalizes on balance sheet re-expansion, commercial deposit accretion, and improved liquidity velocity that drives fee generation and loan volumes.

XLK // Technology

Displaying a positive correlation of Pearson r = +0.14 (R² = 0.02) and elevated beta sensitivity of +2.65%, long-duration mega-cap tech cash flows directly re-rate as abundant systemic liquidity lowers terminal equity hurdle rates and fuels capex deployment.

▼ REGIME HEADWIND SECTORS

XLC // Communication Services

With the lowest correlation across the complex at Pearson r = +0.07 (R² = 0.01) and beta sensitivity of just +1.1%, XLC experiences capital rotation outflows into higher-beta liquidity plays as macro risk tolerance climbs.

XLE // Energy

Registering a muted Pearson r = +0.08 (R² = 0.01) and +1.62% beta sensitivity, Energy lags in unsterilized liquidity expansions where physical supply-demand imbalances and capital discipline dominate performance over macro liquidity tailwinds.

XLU // Utilities

Holding an anemic Pearson r = +0.09 (R² = 0.01) with beta sensitivity of +1.29%, bond-proxy utilities face institutional factor-rotation drag as capital rotates out of defensive dividend profiles into high-velocity pro-cyclical sectors.

HISTORICAL ANALOG // 2020-2021 Quantitative Easing & Broad Liquidity Surge: Unprecedented M2 expansion unlocked historic multiple expansion where S&P 500 factor leadership pivoted aggressively into high-beta, duration, and financial assets, while bond-proxy defensives (Utilities and Staples) severely lagged on a relative basis.

EQUITIES MOST SENSITIVE TO M2SL STOCK BETA

TICKER	LAST	% CHG	CORR (r)
UNH Health Care	$406.97	-0.96%	+ 0.11
GS Financials	$894.55	-3.58%	-0.68
XOM Energy	$187.25	+2.16%	+ 0.60
JPM Financials	$337.04	-1.90%	-0.59
AMZN Consumer Discretionary	$240.35	-1.41%	-0.52
AVGO Technology	$326.08	-5.48%	-0.51
AAPL Technology	$344.63	-1.23%	-0.48
NVDA Technology	$204.64	-4.22%	-0.47
CAT Industrials	$622.75	-3.81%	-0.45
NFLX Communication Services	$62.08	+0.05%	-0.43