Warsh's Hawkish Turn Falls Hardest on High-Beta Momentum

August 28, 2026 · 16:21 ET

Warsh's hawkish Jackson Hole debut cost the index almost nothing and cost one trade almost everything: the top 50 high-beta momentum names fell -5.81% into the close while stocks in neither screen sat at -0.15%. Beta at z=-1.8 accounted for 26.9% of the day's cross-sectional variance, and effectively the whole of that effect sits in the single highest-exposure bucket. This was not a broad reduction of risk — hedge-fund-owned names and most shorted were both close to flat.

Kevin Warsh used his first Jackson Hole address to say inflation isn't slowing Bloomberg, and Philadelphia Fed President Patrick Harker added the same day that a hike would be an "important signal" to the market Bloomberg. The front end took him at his word: the 2-year yield rose 12.4 basis points to 4.36% while the 30-year added only 2.2 CNBC. The dollar firmed +0.51% to 99.67 CNBC. At the index level equities barely engaged — SPY -0.26% — and in the cross-section they engaged completely.

FactorReturnZ-Score5d Z20d Z63d ZCategoryDirection
Beta-1.73%-1.8-0.5+0.2-1.2Style-RiskMost market-sensitive names lagged
Short-Sale Activity+0.19%+1.8-0.7+1.1+0.5Style-FlowMost heavily short-sold names outperformed
One-Day Momentum-0.50%-1.7-1.2-1.2-0.1Style-MomentumYesterday's gainers reversed
Gold-0.55%-1.7-0.1+3.1+0.8ThematicGold-exposed names lagged
Value+0.39%+1.7-0.1-0.4-0.5StyleCheapest names outperformed
Size+0.54%+1.5+1.0-0.2-0.5StyleLarge caps outperformed
Semiconductors-0.74%-1.2-0.8-1.2-1.3ThematicSemis exposure lagged
Treasury (Duration)-0.38%-1.2-1.9-0.8-0.3ThematicLong-duration names lagged

The Blow Went Into One Trade

Beta was the axis. The factor returned -1.73% at z=-1.8 and accounted for 26.9% of the day's cross-sectional variance, its top bracket against the past year — the exposure a levered book actually loads on has rarely been this load-bearing. The shape says more than the level: the highest-exposure bucket lost -5.9% and the rest of the distribution scarcely moved.

Today's Return by Beta Exposure z=-1.8
Essentially the entire beta effect sits in the top exposure bucket at -5.9%, with the rest of the cross-section flat (z=-1.8).
Today's Return by Beta Exposure z=-1.8
BucketAvg Ret Pct
10.26
20.39
30.28
4-0.08
50.05
60.15
7-0.26
8-0.05
9-0.33
10-0.47
11-0.54
12-0.62
13-0.95
14-0.61
15-0.84
16-1.21
17-2.35
18-3.65
19-4.56
20-5.86

The high-beta momentum cohort puts a number on the same fact. The top 50 names fell -5.81%, ranked 49th worst of 1,672 days since 2020, and the wider joint screen -4.16%; names in neither screen sat at -0.15%. The more precisely a name fit the profile, the harder it fell — the top-50 move ran 1.4 times the wider group's against a 1.14 norm — and the low printed at 15:57, with nothing coming back into the bell.

High-Beta Momentum Cohort — Today's Session Path
The top 50 high-beta momentum names ran to -5.81%, 49th worst of 1,672 days since 2020, with the session low of -5.9% at 15:57.
High-Beta Momentum Cohort — Today's Session Path
SeriesRet Pct
joint-4.16
tight50-5.81
market-0.66
rest-0.15

The instruments that expressed it were the ones with the largest trailing-month gains behind them. Uranium and gold miners led the 20-day tables and led the decline; crypto miners, already deep in a three-month drawdown, simply kept going. URA -5.25% and NLR -4.96% both traded at roughly 2.1× the typical session pace, on a day the EIA eia.gov reported U.S. uranium production more than tripled in 2025 EIA.

ETFThemeToday1d Ago5d Ago20d Ago63d Ago
WGMIcrypto miners-8.10%+2.88%-0.98%-12.12%-32.92%
URAuranium-5.25%+0.67%+10.33%+21.78%-4.69%
GDXgold miners-3.99%+1.24%+3.85%+35.05%+18.94%
ARKKinnovation growth-3.42%+1.87%+4.94%+19.86%+7.86%
SMHsemiconductors-3.42%+3.10%+1.84%+6.33%-4.47%
IWMsmall cap-1.36%+0.29%+0.72%+2.47%+2.66%
SPYlarge cap-0.26%+0.66%+1.11%+3.97%+2.19%
XLFfinancials+0.30%-0.65%+1.63%+1.54%+12.89%
XLYconsumer discretionary+1.12%-1.09%-0.69%+3.11%-5.06%

Whom the Sellers Left Alone

Hedge-Fund Ownership did not move: z=-0.16 residualized and z=+0.06 raw. Flat on both is the version that means the hedge-fund-owned names genuinely were not the ones being hit, rather than being hit through their style tilts. The top-50 high-beta momentum names carry a flat hedge-fund tilt and sit modestly less shorted than the universe at -0.58σ; their standout characteristic is a habitually retail-heavy trading profile, +1.2σ on morning activity.

Short-Sale Activity returned +0.19% at z=+1.8, a print in the 98th percentile since 2020: the most heavily short-sold names outperformed the barely-shorted ones, and yesterday's short-sale flow lost money on a one-day view. That is the model's single most statistically reliable effect running backwards for a session. Value +0.39% and Size +0.54% are the same day from the other end — the cheap and the large is where money sat still. Long-Term Momentum -0.62% is those same high-beta names wearing a second label; its exposures correlate 0.60 with the screen. Style factors took 37.1% of cross-sectional variance against a 21.7% one-year average while the stock-specific share fell to 50.4% from 66.5%, and implied index volatility finished at 14.45 versus 14.51 yesterday. The index never noticed what happened underneath it.

Gold Gives Back the Front of a Top-1% Run

Gold turned at z=-1.7 after a 20-day run at z=+3.1. GDX fell -3.99% having gained +35.05% over 20 sessions; SLV -4.41% and GLD -3.24% both traded at 2.6× their typical pace as the metals complex reversed on the Jackson Hole remarks Economic Times. Miners were the sharp end: the highest-gold-exposure bucket lost -4.4% against a factor return of -0.55%.

Gold — Cumulative Factor Return, Since 2020
Gold's completed 20-day run through Thursday's close, +4.48%, ranked in the 99.2nd percentile of all 20-day windows since 2020 — its most extreme stretch since January 29.
Gold — Cumulative Factor Return, Since 2020
DateCumret Pct
2020-04-16-0.16
2020-05-080.17
2020-06-02-0.95
2020-06-240.95
2020-07-172.79
2020-08-102.06
2020-09-013.45
2020-09-242.86
2020-10-163.46
2020-11-092.94
2020-12-023.89
2020-12-243.80
2021-01-204.24
2021-02-114.43
2021-03-083.33
2021-03-303.83
2021-04-224.12
2021-05-143.08
2021-06-083.65
2021-06-302.55
2021-07-231.65
2021-08-162.98
2021-09-081.28
2021-09-300.97
2021-10-220.66
2021-11-15-0.28
2021-12-08-1.68
2021-12-31-2.26
2022-01-25-3.36
2022-02-16-2.81
2022-03-11-1.05
2022-04-04-1.40
2022-04-27-2.14
2022-05-19-1.19
2022-06-13-1.38
2022-07-07-3.75
2022-07-29-3.65
2022-08-22-4.67
2022-09-14-4.16
2022-10-06-4.31
2022-10-28-4.89
2022-11-21-2.75
2022-12-14-1.75
2023-01-090.37
2023-02-01-0.85
2023-02-24-2.13
2023-03-20-0.62
2023-04-120.01
2023-05-04-0.40
2023-05-26-1.52
2023-06-21-1.76
2023-07-14-1.24
2023-08-07-2.14
2023-08-29-2.31
2023-09-21-2.44
2023-10-13-2.52
2023-11-06-1.78
2023-11-29-1.02
2023-12-21-1.13
2024-01-17-1.95
2024-02-08-4.09
2024-03-04-4.53
2024-03-26-4.56
2024-04-18-3.04
2024-05-10-2.37
2024-06-04-3.51
2024-06-27-3.81
2024-07-22-3.21
2024-08-13-2.70
2024-09-05-3.44
2024-09-27-2.12
2024-10-21-1.83
2024-11-12-1.49
2024-12-050.40
2024-12-300.01
2025-01-240.49
2025-02-181.10
2025-03-121.26
2025-04-032.98
2025-04-282.84
2025-05-202.02
2025-06-123.32
2025-07-082.31
2025-07-302.76
2025-08-215.05
2025-09-157.48
2025-10-0710.36
2025-10-2910.21
2025-11-2010.66
2025-12-1511.78
2026-01-0813.74
2026-02-0214.17
2026-02-2514.98
2026-03-199.93
2026-04-1312.59
2026-05-059.16
2026-05-288.60
2026-06-226.58
2026-07-156.21
2026-08-066.94
2026-08-2810.59

One-Day Momentum at z=-1.7 is not a fresh development either. The factor has run -1.54% over 20 sessions with the 5-day and 20-day z both at -1.2, and its bucket slope points the same way at every horizon. Today the top bucket — yesterday's biggest gainers — fell -2.0% and drove the spread.

Bucket Return Profile — One-Day Momentum z=-1.7
The slope is negative at every horizon — Spearman -0.62 at one day, -0.71 at five, -0.69 at 20 — so recent gainers have been reversed consistently, not just today.
Bucket Return Profile — One-Day Momentum z=-1.7
BucketRet 1D PctRet 5D Norm PctRet 20D Norm PctRet 63D Norm Pct
1-1.391.451.36-0.42
2-0.751.091.810.76
3-0.470.541.340.68
4-0.620.341.521.57
5-1.230.530.510.42
6-0.800.361.171.08
7-0.390.791.261.06
8-0.910.250.800.67
9-0.840.421.030.97
10-1.290.370.610.67
11-0.650.450.640.82
12-0.960.320.600.64
13-0.640.130.930.75
14-0.830.520.761.27
15-0.970.300.891.16
16-1.46-0.260.280.39
17-1.570.020.410.50
18-1.460.150.871.05
19-2.000.360.230.35
20-2.000.300.74-0.09

Half the Biggest Moves Owed Nothing to the Fed

Marvell closed the regular session -10.01% and slipped a further -0.55% after the bell, erasing $22.6B of market value, after a beat-and-raise met a gross-margin guide of 57.5–58.5% on custom-silicon mix CNBC. The split is the part worth knowing: roughly half the decline was style, almost all of it beta, and half the company's own news — even the marquee semiconductor loser was as much today's factor complex as its own print. Elastic closed +19.23% on a Q1 beat and raised FY27 guidance CNBC, and Gap closed +12.96% Bloomberg.

PayPal -12.65% was the day's largest stock-specific move with essentially none of it factor-carried Bloomberg. PG&E -7.41% was the second, on a California utility-liability development our source set does not carry. Nvidia -4.53% shed $269B of market value in the session after its print, more than half of that its own move rather than the beta complex. Three of the four largest moves on the board were company stories on a day the story was a Fed speech.

Economic Context

The University of Michigan data.sca.isr.umich.edu's final August sentiment survey, released at 10:00 AM ET, showed the index at 51.7, a 6.3% monthly decline from July's 55.2, with one-year inflation expectations cooling to 4.0% and long-run expectations firm at 3.3%. The New York Fed's staff nowcast, published at 12:45 PM ET, trimmed Q3 GDP bea.gov to 2.2% from 2.3%, and revised BLS data released Friday cut private-sector employment by 79,000 jobs through March — a softer labor picture arriving the same morning the Fed chair ruled out reading inflation as beaten.

Factor Regime Reference

Variance decomposition: live intraday — 20260828 session, bracketed against its trailing-year range. Factor returns are trailing through last close. Total cross-sectional dispersion: 45%ile of the past year.

Variance mix — % of total, today vs 1d ago vs 1-yr avg

market 64%ile style 92.0%ile thematic 85%ile idiosyncratic 12%ile

Today (live)
37%50%
1d ago
15%83%
1-yr avg
9%22%66%

Variance explained — today vs. factor's trailing-year range

Beta 26.87% · 93%ile Size 2.82% · 94%ile Semiconductors 2.07% · 93%ile Value 1.43% · 94%ile Treasury (Duration) 1.01% · 96%ile One-Day Momentum 1.83% · 90%ile Gold 0.93% · 83%ile Short-Sale Activity 0.28% · 90%ile Long-Term Momentum 2.61% · 65%ile Profitability 0.39% · 70%ile Dividend Yield 0.26% · 66%ile International 0.25% · 59%ile

Marker = the factor's share of today's total variance, placed in its own trailing-year range (box 25–75%ile, ticks 90%ile and max). Amber marker = unusually load-bearing today (≥90%ile of its own year). Factor name green = up today / red = down.

Correlation & dispersion — realized vs implied

Pairwise realized correlation (20d): 8.65% 5.1%ile since 2020 · 64%ile 3m

Top-500 pairwise: 9.19% 5.2%ile since 2020 · 30%ile 3m · implied (Cboe COR1M): 8.89 2.5%ile of its own history (gap +0.3pp)

Realized 20d vol (ann. pts): all stocks 44 vs VIXEQ 35 · index 11 vs VIX 14 · style factors 20 73%ile

20-day window (19 completed days + today); percentiles vs model history since 2020; '3m' tokens rank vs the trailing 63 trading days; definitions in Terms below. Implied prints (Cboe) are delayed ~15 min. as of 15:58 ET

Top 50 high-beta momentum names (eq-wt, since-2020 rank): -5.8% 2.9%ile · rest of market -0.1%

Trailing factor returns

FactorToday1d5d20d60d
Style-Risk
Beta-1.73% z-1.8+0.84%-1.12%+0.75%-9.20%
International+0.19% z+0.6-0.15%-0.03%-0.26%-0.72%
Residual Volatility-0.13% z-0.2+0.75%+0.16%+3.30%-1.98%
Style
Value+0.39% z+1.6-0.45%-0.03%-0.43%-1.16%
Size+0.54% z+1.5+0.07%+0.78%-0.34%-1.65%
Profitability+0.21% z+1.1-0.34%-0.00%-1.36%-1.95%
Dividend Yield-0.17% z-1.0+0.01%-0.23%+0.52%-1.10%
Leverage-0.03% z-0.2-0.27%-0.21%-1.71%-3.26%
Growth+0.01% z+0.1+0.33%+0.24%+0.75%+2.95%
Liquidity+0.00% z+0.0+0.09%-0.22%+1.72%-1.18%
Style-Momentum
One-Day Momentum-0.50% z-1.8+0.05%-0.78%-1.54%-1.59%
Long-Term Momentum-0.62% z-0.9-0.14%-0.91%-2.58%-7.59%
Medium-Term Momentum-0.15% z-0.5+0.35%+0.01%+0.98%+0.69%
Short-Term Momentum-0.01% z-0.1-0.30%-0.63%-2.11%-7.30%
Style-Positioning
Short Interest-0.04% z-0.2+0.01%+0.05%+0.03%+1.00%
Hedge-Fund Ownership-0.01% z-0.1-0.13%+0.05%+0.48%+1.46%
Style-Flow
Short-Sale Activity+0.19% z+1.8-0.27%-0.17%+0.53%-0.07%
Morning Activity+0.07% z+0.5+0.17%-0.00%+1.84%+1.17%
Thematic
Gold-0.55% z-1.7+0.30%-0.03%+4.49%+3.28%
Semiconductors-0.74% z-1.2-0.28%-1.15%-3.26%-8.60%
Treasury (Duration)-0.38% z-1.1-0.45%-1.37%-1.20%-0.03%
China+0.23% z+0.6+0.53%+0.39%+0.45%-0.45%
Bitcoin / Crypto+0.07% z+0.2+0.76%+0.66%+1.49%+1.73%
Oil-0.02% z-0.1+0.45%-0.28%+2.22%-2.34%

5/20/60d windows include today's session; 1d is the previous session.

Terms

Market variance share. The fraction of cross-sectional variance explained by the market factor — the attribution companion to pairwise correlation, not a substitute for it.

Factor z-score. Today's factor return divided by its daily-return standard deviation over ~1,600 trading days.

High-beta momentum cohort. US names above $2B market cap in the top quintile of both raw beta and 12-month momentum; membership frozen at each month's first business day. “Top 50” = the 50 strongest by combined rank.

Stock-specific (idiosyncratic) return. The part of a stock's move not explained by market, style, or thematic factors in our decomposition.

Data compiled by FactorPulse AI; edited and verified by Jeff Klein. For informational purposes only. Does not constitute financial advice, an investment recommendation, or an offer to buy or sell any securities. Always consult a qualified financial professional before making investment decisions.

For more on factor construction methodology, see www.factorpulse.com/glossary.

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