S&P futures are flat after Monday’s drop in the S&P 500 where a rout in Apple weighed on tech companies and tensions with North Korea persist; Asian stocks are modestly lower while Europe has shaken off the Korean crisis and is in the green on the back of a sharp drop in the EURUSD which has tumbled below 1.18 as the USD rises ahead of much anticipated speeches by the Fed Chair and the French president.
Authored by Paul Brodsky via Macro-Allocation.com,
Golden Age
Once upon a time the capital markets consisted of a fairly closed community, comprised on one side by mostly clever, well-connected men working together in syndicate to maintain control over national economic and financial affairs, and on the other side by mostly high earners spread disparately across the land hobnobbing with the syndicate’s local representatives.
As last week ended, VIX was crushed back near record lows to ensure the S&P 500 closed above 2500 and to prove all is well in the world - despite quakes, storms, floods, nukes, and worst of all... Fed balance sheet unwind plans.
And VIX speculators have never been more short (implicitly levered long stocks)...
So why, given all this exuberance and complacency, is uncertainty around VIX's future trajectory at relative record highs?
Goldman is becoming increasingly worried that a correction - and a sizable one at that - appears imminent.
Two weeks after the investment bank announced that according to its Bear Market Risk Indicator the odds of a crash have risen to 67%...
European stocks rose as the euro tumbled following Germany’s election result which was dubbed a "Nightmare Victory" for Merkel and could lead to potentially complicated coalition talks and perhaps even another early election. U.S. equity-index futures point to a lower open, while Asian equities slide after a plunge in Chinese property developer names over worries of new real estate curbs as well as tech stocks following more iPhone delivery concerns. S&P500 futures are steady, down slightly by just over -0.1%, after closing little changed on Friday.