How extreme is the July 2026 momentum unwind?

Asked exactly no one with a life.

It’s the middle of July, folks. You’re supposed to be — I don’t know — passed out drunk by an inlet somewhere. Or otherwise working on a case of skin cancer next to a large body of seawater.

A longtime reader emailed me a few weeks back and suggested I cash in the equity on my properties and travel around the country bouncing from luxury rental to luxury rental.

It’s not a bad idea. My life’s just one long vacation, and I don’t particularly enjoy it when I’m home. So, why be home? (The Perry Lane in Savannah’s listed at <$300/night on several days looking out over the next few weeks. I just got back from a trip but… well, again, why be home?)

Anyway, the momentum unwind. It’s a big deal. I guess. I covered it here. If you’re in a beach chair and the Adderall you chopped up with your room key and snorted through a piece of rolled up resort letterhead (too specific?) is preventing you from falling asleep, you can read that linked article. You’ll be out cold in no time. Then you’ll wake up baked and sweating Bombay just in time for more Bombay and salmon Wellington.

I’m going to answer the question I posed here at the outset now. 300 words later. It’s extreme. The momentum unwind’s extreme. Have a look.

Those charts are from SocGen’s Andrew Lapthorne. Andy, I’m sorry I seasoned them with crushed up Adderall and drowned them in gin. Then again, everything’s better served with prescription drugs and liquor.

“Momentum has gone from market darling to market casualty,” Lapthorne wrote Monday, noting that after another abysmal stretch last week, “the stocks with the strongest 12-month price momentum are now down 28% since the unwind began at the end of June.”

In the same brief piece, Lapthorne marveled at the “striking” concentration of the selling. “The highest-flying names have borne the brunt of the correction,” he said, noting that the top 50 momentum stocks collectively plunged some 30%. That’s the chart on the left.

Of course, as shown on the right, those same stocks rose 140% over the preceding 90 days. “When enthusiasm reaches those levels,” Lapthorne went on, “gravity often reasserts itself.”

Put differently, you can’t stay high forever. Alas.