Liquidity Storm Prediction vs. Actual Market Performance (Nov 23-28, 2025)

On Nov 23, 2025, SeekingAlpha predicted a $150B liquidity storm from Treasury settlements would lead to S&P500 downside, citing depleted reverse repo (RRP) balances forcing cash from risk assets [1]. However, internal data shows the S&P500 gained ~3.7% (Nov21-Nov28) with daily gains in all sessions post-Nov23 [0]. Reverse repo balances were confirmed depleted (from $2T+ to near zero) [2], but market performance contradicted the forecast. Possible offsets include pre-pricing of liquidity risks, corporate buybacks, or foreign inflows not captured in our analysis.

1. Discrepancy Between Prediction & Outcome
   : Liquidity concerns did not translate to market losses, indicating the market may have priced in risks or been supported by other factors.
2. Reverse Repo as Buffer Indicator
   : Depleted RRP reduces the market’s ability to absorb future liquidity shocks, per Bloomberg [3].
3. Sector Resilience
   : Energy (+1.14%) and Consumer Defensive (+0.89%) sectors outperformed, suggesting investor preference for stable or cyclical assets amid uncertainty.

• Risks
  : Future liquidity shocks due to depleted RRP; unconfirmed $150B settlement data.
• Opportunities
  : Identifying outperforming sectors (Energy, Consumer Defensive); monitoring RRP levels for early warning signals.

• S&P500 gained ~3.7% (Nov21-Nov28) despite liquidity storm prediction.
• Reverse repo balances depleted (from $2T+ to near zero).
• Energy (+1.14%) and Consumer Defensive (+0.89%) sectors led gains.
• Volume decreased from 6.04B to 2.56B, indicating reduced participation.