Five In Five

February 2025

Five in Five is a monthly publication where we share graphs around five topics that illustrate the current state of the markets, with brief commentary that can be absorbed in five minutes or less.

This month's topics include:

1. Treasury Curve
2. Treasury Issuance
3. Job Openings Trending Downward
4. New Home Sales Rebounding from 2022 Lows
5. Equal Weighted S&P 500 Keeping Pace in 2025

1. Treasury Curve

Source: BTC Capital Management, Bloomberg

• The 2s30s curve has steepened by more than 150 basis points in two years.
• An unwinding of recession fears is the main catalyst.
• This should continue to steepen if the Fed and fiscal policy favor growth.
• The Fed seems content to be behind the curve and react once a narrative is sufficiently clear.
• Therefore, sustained weakening growth would raise hard landing prospects and flatten this Treasury curve.

2. Treasury Issuance

Sources: BTC Capital Management, Bloomberg, Macrobond

• New Treasury Secretary, Scott Bessent, said there are no plans to reduce the existing book-to-bill (T-Bill) ratio.
• He was previously critical of Yellen’s use of this tool to suppress 10-year yields.
• The new administration has communicated a desire to lower 10-year yields, but not the Federal Funds rate.
• Longer yields were lower following this news as it keeps supply constrained.
  
  

3. Job Openings Trending Downward

Sources: BTC Capital Management, FactSet

• Job openings in December, as measured by the Job Openings and Labor Turnover Survey (JOLTS) metric, came in lower than expected and have been trending downward since peaking in March of 2022.
• The most recent number is now below the pre-COVID peak level, which was reached during 2018.
• The labor market is currently viewed as stable, given the recent unemployment levels, however, the JOLTS trend as of late shows there may be some potential weakness regarding trends in current job openings.
  
  

4. New Home Sales Rebounding from 2022 Lows
 

Source: BTC Capital Management, FactSet

• New home sales in December came in higher than expected as the housing market continues to gain momentum.
• New home prices increased 2.1% year-over-year. The increase in prices has slowed, amid rising inventory of new homes.
• Regionally, the Midwest saw the largest percentage increase in new home sales in 2024, far outpacing other regions of the country.

5. Equal Weighted S&P 500 Keeping Pace in 2025

Source: BTC Capital Management, FactSet

• In a reversal from 2024, the equal weight S&P 500 is keeping pace with the S&P 500 year-to-date.
• The significant concentration in a small handful of stocks in the S&P 500 was fully on display January 27 when a small number of stocks sold off significantly, while the rest of the S&P 500 actually rose on that day.
• This year’s stock market rally appears to be broader based than previously as other stocks and sectors aside from the Magnificent 7 have performed well.

Investment products and services may lose value, are not a deposit, are not guaranteed by any financial institution, and are not FDIC insured or insured by any government agency.

Sources: BTC Capital Management, Bloomberg, FactSet, Macrobond

The information provided has been obtained from sources deemed reliable, but BTC Capital Management and its affiliates cannot guarantee accuracy. Past performance is not a guarantee of future returns. Performance over periods exceeding 12 months has been annualized. This document is intended for informational purposes only and is not an offer or solicitation with respect to the purchase or sale of any security. Statements in this report are based on the views of BTC Capital Management and on information available at the time this report was prepared. Rates are subject to change based on market and/or other conditions without notice. This commentary contains no investment recommendations and you should not interpret the statement in this report as investment, tax, legal, and/or financial planning advice. All investments involve risk, including the possible loss of principal. Investments are not FDIC insured and may lose value.