In Case You Missed It: Key Charts of the Week:

By Mark Masterson on August 15, 2025

A picture is worth a thousand words……

Below are the Key Charts of the Week:

Moving on to the budget deficit reported for July……

• US July budget deficit $289 bln – CBO Estimate

• BREAKING: Total US debt has officially crossed above $37 trillion for the first time in history.
• This puts total US debt up +$780 billion since the debt ceiling was raised following the signing of the “One Big Beautiful Bill Act” into law on July 4th.
• This equates to an average rise of a whopping +$22 billion per day.
• Last week alone, the government sold $724 billion in Treasuries through 10 auctions.
• https://wolfstreet.com/2025/08/08/government-sold-724-billion-of-treasuries-this-week-debt-hits-37-0-trillion-getting-ready-for-the-feds-shift-to-t-bills/

8 11 25

A few charts from the weekend…..

The Nasdaq 100 ETF has an interesting pattern here…..

It is a bullhorn pattern – that often can signal a broadening topping pattern.  Needs to be watched….

Another – different view of the market concentration today……

• LARGEST 10% OF U.S. STOCKS NOW MAKE UP 76% OF MARKET CAP — HIGHEST CONCENTRATION IN HISTORY
• The top 10% largest US stocks now reflect a record 76% of the US equity market.
• This has officially surpassed the previous record set before the Great Depression in the 1930s.
• By comparison, at the 2000 Dot-Com Bubble peak, the top 10%’s share was at ~73%.
• In the 1980s, this figure was below 50%.
• Meanwhile, the top 10 stocks in the S&P 500 now represent a record 40% of the index’s market cap.
• We are witnessing history.

Kobeissi letter 8 11 25

The concentration is being led by the tech sector….

• The technology sector’s performance relative to the S&P 500 hit a record 2.2x in July.
• The price gap between tech and the S&P 500 has more than DOUBLED over the last 8 years.
• Since then, the S&P 500 Information Technology sector and the S&P 500 have returned +421% and +152%, respectively.
• As a result, the ratio now sits more than 2 standard deviations above its historical average.
• Even at the peak of the 2000 Dot-Com bubble, this ratio topped out at just 1.6x.

Interesting look at the P/E for the market.

It stands at an expensive 22X for the market cap weighted S&P 500

However, when you equal weight the index – by reducing the weight of tech – the P/E is a more manageable 17X

How about the below charts comparing gold returns to the stock market…..

Do you think investors are aware of this?

In this lookback over twenty-five years, ten years, and three years, we start the comparative gain measures from the same date in August of the first year and go to last Friday’s close (August 8th).

Below from Michael Oliver of MSA

Michael Oliver 8 11 25

Update on Buffet’s cash pile….

Nearly 30% of Berkshire Hathaway’s assets are just cash and T-bills.

This is the largest cash pile in U.S. corporate history.

8 11 25

Trump also highlighted the recent tariff income and its benefits.

His comment that “Trillions” of tariff dollars are coming in certainly caught my eye….

No doubt tariff income is on the rise.  July saw almost $30 billion of tariff taxes roll into the Treasury.  Trillions is quite an exaggeration.  At the current rate, tariffs would raise $300-$400 billion per year. 

8 12 25

We hit $37 trillion last week in debt.  Here is a great chart showing you how quickly we are hitting the trillion dollar milestones….

Its now once per year.

We doubled the debt in the past 10 years.

8 12 25

Nobody sees a hard landing or recession any longer….

We are down to 5%….

As a contrarian – that worries me just a bit.

8 12 25

Take a look at corporate buybacks this year versus the last 10+ years…

We are setting a record.  No wonder the market keeps going up daily

8 12 25

Yet, how about this stat…..

• 71 large US companies went bankrupt in July, the highest monthly total since the 2020 pandemic.
• This follows 66 and 64 fillings in June and May, respectively.
• Year-to-date, there have been 446 large bankruptcies, the most in 15 years.
• This is already higher than the full-year totals for 2021 and 2022, when 405 and 373 firms went bankrupt.
• Industrial and consumer discretionary companies have led the surge, with 70 and 61 filings, respectively.

Here is why Bessent and Trump need lower rates……

The administration is running the economy hot via deficit spending.  In order for this to work at todays very high debt levels, it requires lower borrowing costs.  Without lower borrowing costs, the debt service payments surge and the deficit balloons too fast.

Take a look….

• The US Treasury posted a $291 billion budget deficit in July, the 2nd-largest deficit for any July on record.
• The gap marks a sharp reversal from June’s $27 billion budget surplus.
• This comes as government spending surged +9.7% YoY to $630 billion, the 2nd-highest since January.
• Meanwhile, revenue rose just +2.5% YoY to $338 billion, including $29.6 billion in tariff revenue.
• The deficit is now up +7.4% YoY, to $1.63 trillion FYTD, putting this year on track for the 3rd-largest deficit in history.

8 13 25

I really do think it is that simple.

I’ve seen numerous comments and articles on CNBC highlighting how Buffet and Berkshire Hathaway has trailed the S&P 500 since May.

Note – I did not see many of those when Berkshire was up 17% and the S&P 500 was -10%.

However, the below chart speaks an interesting message that I am not sure it intended to shout….

Take a look at the periods where historically Buffet trails the S&P 500 performance since 1998……

The only comparable periods are….

• The Dotcom bubble
• The Global financial crisis
• The Covid pandemic
• Today….

It suggests that Buffet lags because he is playing defense right before something breaks in the market.

Also notice that after this window of underperformance historically, Buffet tends to outperform.

It suggests patience.

8 13 25

So – what should the Fed be looking at prior to the September meeting?

CPI inflation has been cooling off.

Core CPI inflation is heating up.

PPI inflation reported very hot.  Month over month PPI inflation: 3-year high

President Trump continues to call for  300+ bps in rate cuts.

A new Fed Chair is about to be announced 8+ months in advance.

That is a lot to consider ahead of a potential rate cut.

Remember, inflation is a monetary phenomenon.

It’s hard to see it falling when running a 7% fiscal deficit and a money supply hitting record highs.

The below chart shows the S&P top 100 largest stocks and their P/E ratios…..

27% have P/E’s over 50.

2/3rds of the top 100 are above 30….

8 15 25

Another sign of risk appetite surging is the explosion in leveraged Exchanged funds…..

• Assets under management (AUM) for US leveraged exchange-traded products (ETPs) hit a record $119 BILLION in July.
• By comparison, the 2021 peak before the 2022 bear market was ~$78 billion.
• Over the last 3 years, assets in ETPs have tripled.
• In 2025, more than 100 leveraged or inverse products have launched in the US, surpassing the previous record of 73 posted in 2024.

8 15 25