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Short positions in TLT, the popular 20-year US Treasury Bond ETF, have spiked to over 130 million shares, up from 107 million last month. TLT has 541 million shares outstanding. Consequently, the short interest has risen from 20% to 24% of the float. Furthermore, TLT's days to cover ratio (short position/average trading volume) is nearly 3.5 days. As the graph below shows, that is far and away the most prominent short position in the ETF in at least the last 15 years.

So what does this tell us? For starters, it helps explain why bond yields have been trending higher. The narratives driving the bets for higher yields include inflation due to tariffs and disappointment over the current deficit spending proposals floating around Congress. However, while the narratives are concerning, the trade is extremely crowded. Furthermore, the narratives are based on expectations, not facts. Most large stocks and ETFs typically have short interest ratios of five or below. This extreme instance could set the stage for a significant short squeeze if yields fall, economic conditions weaken, or the narratives change.

As the old saying goes, when everyone is on one side of the boat, move to the other. See the Tweet of the Day for another example of a crowded trade.

What To Watch Today

Earnings

• No notable earnings reports today

Economy

Market Trading Update

Last week, we discussed how the rally had repaired much of the previous damage following "Liberation Day." However, we also made competing cases for the bulls and bears on the market's next move.

"It is always difficult to say whether this is a 'bear market' rally while you are in the midst of it. In hindsight, these things are easy to identify, and investors have plenty of reasons to play the 'could've, should've' game. However, some valid arguments exist about why the recent correction was just that, and may now be over."

This past week, the market continued its advance. There is little reason to be bearish with key overhead resistance levels broken. However, as shown, the markets are reaching decently overbought levels after being extremely oversold. This suggests that at least for now, the "easy money" has been made. With the market above the 200, and above the 50 and 20-DMA, pullbacks should be between 5600 and 5800. Investors can use such a pullback to increase portfolio equity exposures and reduce hedges accordingly. Conversely, 5000 to 5200 becomes the next critical target if those lower supports are violated. However, such would require some unexpected event to unfold.

Given the reduction in tariff-related risk and stable economic data, we suspect the market will hold bullish support. That statement follows our analysis from earlier this week, which discussed whether we have returned to a bull market or if this is still a bear market rally. That analysis compared the current market advance to the 2022 corrective cycle. However, that article elicited quite a few comments about why the recent "tariff" sell-off could be like the 2020 COVID-pandemic decline and recovery. It's a fair question and worth a few words.

2020 vs 2025

As shown, there is an analogy between the current market recovery and that seen in 2020 following the pandemic. However, it is worth remembering that there are many competing differences between the current macroeconomic backdrop and that of 2020.

However, as we discussed in that previous analysis, even a "can't stop, won't stop bull market" gives those who can be patient better risk/reward opportunities to increase equity exposures. For example, after the initial rally off the March 2020 lows, the market pulled back and consolidated briefly before rallying further. Then, another longer consolidation process that year provided another entry point for bullish investors.

The weekly Technical Gauge we produce each week in this newsletter below follows the same path as 2020. While not yet back to bullish technical extremes, it is moving quickly higher to more elevated levels. When those readings reached 80, the market went through a longer consolidation process in 2020.

So, is this 2022 where the recent rally will fail and test lower levels? Maybe. Or, is it more like 2020, where the rally continues with only mild pullbacks along the way? Possibly. The true answer is that I don't know. However, it is worth considering that there are many macroeconomic differences today compared to 2020. That lack of fiscal and monetary support, slowing economic growth, and tighter monetary policy are headwinds to higher stock prices. But, it is logical that the latest bullish market action has investors questioning a more cautious approach to the markets.

The same is true for us. We are currently underweight equities and hedged. However, the need for hedges is quickly declining, and the need for equity exposure is increasing. It's a tough battle between creating portfolio performance and risk management. We are sticking with risk management until things become more certain, at least for now.

The Week Ahead

We get a break this week after a hectic week of economic data. With little data, investors are likely to focus on Fed speakers. In particular, has the recent round of inflation data eased their tariff-related inflationary concerns? Powell will speak on Sunday, May 25th. On Thursday, the release of the Chicago Fed National Activity Index (CFNAI), which comprises 84 indicators, will help us better assess the economy's health. Thus far, as shown below, the index doesn't signal that poor sentiment and tariffs are weighing on economic activity.

Corporate Stock Buybacks- Do They Affect Markets

As of May 2025, corporate stock buyback authorizations are on track to eclipse $1.35 trillion this year, with more than $1 trillion executed. This will exceed any other year in the market since the turn of the century. Such should be unsurprising with Apple (AAPL) announcing an additional $100 billion and Google adding another $70 billion to their programs (those two programs will account for 12% of the total alone).

The data should lead one to question why corporate stock buybacks have grown steadily since the turn of the century. Such is particularly the case when the overreliance on buybacks at non-accretive valuations to boost stock prices has become commonplace. Such a statement undermines the fallacy that corporate stock buybacks are solely a return of capital to shareholders. For example, Apple’s $110 billion buyback plan in 2024 raised questions among some investors about whether the company focused too much on immediate stock price increases rather than on investments that could drive long-term value. That statement should not be overlooked, given that 5-year annualized revenue growth has been flat since 2018. (Chart courtesy of SimpleVisor.com)

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The use of the processional cross as the altar crucifix seems so out of place. Cant’s we go back to the “Benedictine” altar arrangement which is part of the Church’s grand liturgical tradition? Pope Leo the Refiner, you can do it!

A few years ago, the principles of diversity, equity, and inclusion (DEI) vaulted to national prominence. Having first gained institutional traction in the mid-to-late 2010s, DEI initiatives spread exponentially after the summer of 2020, amid the flurry of anti-racist activism that followed George Floyd’s death. Fortune 500 corporations, major nonprofit organizations, large professional firms and associations, and institutions of higher learning launched DEI programs if they had not already. DEI became a nationally recognized brand and multi-billion-dollar industry. 

But for nearly two years now, institutional DEI has been in retreat. The retreat began in the summer of 2023, when the Supreme Court struck down affirmative action in college admissions. A more decisive shift occurred after the October 7, 2023, attacks on Israel. Hamas’s assault was still underway when campus groups across the country publicly blamed Israel. A couple months later, the presidents of Penn and Harvard—institutions not known for protecting conservative speech—equivocated in legalese when asked whether calls for the genocide of Jews violated their schools’ codes of conduct. As Israel’s invasion of Gaza unfolded, a stream of commentators argued that Israel, not Hamas, bore primary responsibility for the civilian bloodshed. More than a few said Israel was perpetrating a genocide. 

These developments offended many Americans, who deduced that many progressives, including those in the DEI industry, were insensitive to Jewish suffering and undisturbed by anti-Semitism. In this context, the usually sympathetic New York Times published critiques of DEI, including an August 2024 guest essay, “DEI Is Not Working on College Campuses. We Need a New Approach,” and an October 2024 investigative report, “The University of Michigan Doubled Down on DEI. What Went Wrong?” 

Anti-DEI efforts shifted into overdrive with President Trump’s victory in the 2024 election. Roughly fifteen states had already passed laws targeting DEI, but Trump took sweeping federal action. His administration eliminated DEI departments and laid off DEI staff across the federal government. It ordered federal contractors and grantees to terminate DEI programs. Recently, it has used federal funding to pressure elite universities to implement various DEI-related reforms. 

Considering these developments, many believe that DEI is dead. That may be true of the DEI brand. According to several recent studies, nearly 40 percent of American companies and a similar proportion of universities have renamed their DEI programs or intend to do so. While the terms inclusion and inclusive remain widespread, diversity and especially equity are giving way to access, engagement, opportunity, belonging, community, and excellence. JP Morgan, for example, now promotes diversity, opportunity, and inclusion, and McKinsey has dropped the term “equity” from its website. The Chief Diversity Officers at Google and Walmart have become the Vice President of Googler Engagement and the Chief Belonging Officer, respectively. Harvard’s Office of Equity, Diversity, Inclusion, and Belonging is now the Office of Community and Campus Life and is headed by the former Chief Diversity Officer.

But DEI (including rebranded DEI) remains a growth industry. Jobs in DEI continue to increase, albeit at a lower rate than in 2021 and 2022. More companies are increasing DEI-related funding than cutting it, and companies that have cut DEI jobs may be outsourcing DEI-like work to consultants. Although many universities have renamed, restructured, and in some cases closed their DEI offices, few have laid off DEI staff. An ongoing report on DEI reform at more than 100 universities cites just a few examples of layoffs and firings, all in Texas. 

In short, companies and universities are rebranding DEI but not laying off or replacing DEI personnel at scale. Critics of DEI thus worry that little has changed or will change—that DEI’s supposed retreat just means old wine in new bottles. Assuming DEI needs substantive reform or replacement, that is a valid concern, and critics should remain vigilant. 

But meaningful change is underway. The corporate world is substantively evolving, not just rebranding, in the DEI domain. According to a recent survey, 40 percent of companies have eliminated representation goals for racial minorities, women, and sexual minorities. Roughly a quarter are pausing internship and career development programs for these groups. Nearly one in five are pausing participation in external rankings such as the Human Rights Campaign’s LGBT-focused Corporate Equality Index. A growing number are adopting or moving toward institutional neutrality. 

Higher education is changing, too. Diversity statements are gone at Harvard and MIT and in various public university systems. Since the October 7th attacks, well over 100 universities have embraced institutional neutrality. New centers of civic education at state flagship universities have created roughly 200 new faculty lines. At elite universities, classical and religious independent institutes are proliferating. So are internal and external programs designed to expose college students to diverse perspectives and encourage civil dialogue and friendship across lines of difference. College presidents increasingly acknowledge the importance of viewpoint diversity to the academy’s truth-seeking mission. The recent backlash against DEI has led to genuine self-examination, prompting many colleges to pivot away from traditional DEI.

If the DEI label is losing traction and institutions are substantively evolving, what, if anything, might replace DEI? Some, like Jonathan Haidt, have urged universities to choose the pursuit of truth over the pursuit of social justice (a synonym of DEI). Others have proposed that companies replace DEI with MEI—merit, excellence, and intelligence. But DEI advocates regard DEI as compatible with, and largely orthogonal to, truth and excellence. For them, DEI is a moral endeavor to improve the internal culture and values of institutions. This moral endeavor, they believe, requires institutions to prioritize the needs of certain groups, especially racial minorities, women, and sexual minorities.  

The problem with DEI is that, as a moral endeavor, it tends to become narrow and divisive. Despite the best intentions, DEI conveys to people that if they do not fit into the designated marginalized categories, they do not need institutional support and should focus on helping those with less privilege. Inevitably, some find this alienating or unfair, particularly if they have suffered a kind of adversity that DEI does not seek to ameliorate. Also, in any institution, some members will simply disagree with DEI’s premises. They may find the identitarian framing corrosive or think the particular focus on race, sex, and sexuality is misplaced. They may subscribe to traditional views of sexual morality or believe that DEI’s claims of oppression are overstated. 

A more uniting moral vision is needed. Causes like viewpoint diversity and new frameworks like pluralism are steps in the right direction, but they do not suffice as moral alternatives to DEI. The push for greater viewpoint diversity in higher education implicitly accepts diversity as a central moral value and seeks to enlarge the concept by adding a viewpoint axis to existing axes like race, sex, and sexuality. The pluralism framework offers recognition to conservative and religious viewpoints and promotes civil dialogue and mutual understanding between opposing ideological camps. Though laudable, these approaches do not posit a universal good or moral value that would unite people in their diverse identities and viewpoints and give people a reason to be civil and seek to understand each other. 

Personalism does this. Personalism begins from the premise that every human being has measureless dignity, simply by virtue of his or her humanity. In broad terms, an institution with a personalist culture seeks to protect and honor the dignity of every member and seek his or her flourishing. This approach naturally preserves what is right and good in DEI while guarding against its missteps. On one hand, personalism aligns with DEI’s mission to combat unjust race-, sex-, or sexuality-based prejudice, which undermines human dignity. But unlike DEI, personalism focuses on what unites people: their status as human beings and their membership in a particular institution. Personalism is skeptical of identity-based discrimination in any direction and recognizes that tension and conflict are resolved through relationship and sympathy more than through trainings and bureaucracy. Above all, personalism attends to the well-being of every employee, including through the promotion of universal virtues like justice, generosity, and fortitude. 

Concretely, institutions seeking to adopt a personalist approach can take various actions. They can encourage job-crafting, a practice that increases worker fulfillment by allowing employees to shape their roles in accordance with their needs, skills, and passions. They can promote balance by expecting high performance but also urging employees to unplug after work and focus on family, friends, and other pursuits. They can institute worker well-being programs, which have led to improvements in employee mental and physical health and social connectedness. They can sponsor employee reading, discussion, and accountability groups designed to foster more virtuous habits. They can make it a priority to recognize and celebrate individuals for growing in character, mastering tasks, or making significant contributions to the institution. They can stress that members of the community must respect others’ viewpoints but never be forced to accept them. They can practice identity-blind, merit-based hiring and compensation.

These are just examples, and there are many more. The point is that personalism offers a way forward that is more fully adequate than traditional DEI to what helps human beings flourish. As DEI retreats, let us hope and seek to ensure that personalism advances. 

Image licensed via Adobe Stock.

Full transcript: https://www.vatican.va/content/leo-xiv/en/events/event.dir.html/content/vaticanevents/en/2025/5/18/regina-caeli.html

“Whoever…willingly and knowingly helps in the promulgation of heresy…   is suspected of heresy.” -Canon 2316, Code of Canon Law (1917-1982)

But what if Pope Prevost really is being accompanied by the spiritual presence of Bergoglio? Shouldn’t we take him at his word?

 A few moments ago, we heard a reading

in which John tells us he saw “a new heavens and a new earth.”

Our world is beautiful!

Every day, as spring unfolds, it’s more marvelous.

Think of all his wonders to behold:

rivers and meadows, waterfalls and canyons,

snow-caps and rain forests, deserts and oceans—

Think of all the forms of life that fill the earth.

When night falls, look up and behold

the spangled sky, littered with gaudy extravagance.

Imagine what wonders fill the countless galaxies!

You fall asleep, dreaming of them!

What a world—why make a new one?

Because it is damaged.

I left out one part of God’s Creation: US!

Human beings have not only the greatest potential—

but we can also do the greatest damage.

So, you and I are the ones who need to be made new;

and a new us means a new heavens and a new earth.

What might that be like?

Well, imagine we could somehow extract from this world,

all the envy, and greed, and pride…

all the anger and apathy and selfishness?

That would be a “new heavens and a new earth”!

That and more is what John saw.

So: how do we get there?

Today you and I celebrate the Lord rising from the dead,

same as every Sunday, but especially in Easter Season.

Ah, but there’s something special today!

Many fellow believers here

will receive the Eucharist for the first time!

So I just asked: how do we get to the new Creation?

The Eucharist is how we get there.

Jesus told us many things.

He said, “I am the Bread of Life”;

He said, “my flesh and my blood are truly food and drink.”

In a few minutes, at this altar,

you’ll hear him say, through me,

“This is my Body” and “This is the Chalice of my Blood.”

So, all that points to the Eucharist we share.

In today’s Gospel, Jesus spoke of “glory”:

The Father gives glory to the Son;

and the Son shares his glory with us.

That happens through the Eucharist.

Boys and girls, I know that your teachers and parents

have taught you many things about the Eucharist.

We believe that we’re together

with Jesus, Mary, the saints and angels—

all heaven and earth, right here in the Mass!

You and I know that we don’t come to receive the Eucharist,

unless we have faith, unless we turn from our sins,

and unless we are ready to live as part of His Church,

the New People, his chosen Bride.

So, the Eucharist is not a gift just for us:

this isn’t a “look at me, I’m special,” day.

Instead, this is a day Jesus chooses us in a new way,

to be givers and sharers of his life, with others.

All this is how we become his new creation.

We might wish for a “one-and-done” process to holiness.

But that isn’t how it works.

You were baptized as babies;

then you had to grow up some, before this day.

And far more lies ahead for you.

God wants us to grow into that new Creation.

And that’s the same for everyone here.

Yes, including grandma and grandpa.

Each of us needs to keep growing in holiness.

Let me tell you a secret…

The communion that matters the most,

isn’t the first…but the last one!

Remember I said, this Creation is wonderful—

but a new one is coming, far better?

This first communion is wonderful;

but the last one—the one that takes us from this world to the next – 

that’s the one to get excited about:

because that communion will never end!

Grownups, maybe you’re looking back

on your first communion.

But don’t look back, look forward—

to your next one, and to that last one!

And, if it’s been a while, do as these young people did:

go to confession, and make another “first” communion,

back on your way to that forever communion!

Boys and girls, I just want to end by saying “Thank you!”

Your eagerness, your joy, is a powerful example for everyone here.

I said a moment ago Jesus wants you to share

the new life he gives you in the Eucharist.

And already, you are witnesses to that 

by your joy and faith and reverence today. Thank you!