As stocks tumbled, the VIX soared
And after 105 consecutive days of closing below 20, the longest streak since 2019, the VIX index finally closed above 20 - in fact above 21 - breaking the streak on day 106. Source: www.zerohedge.com, Bloomberg
WIth the Vix <17, Brent oil<$90/bbl and S&P 500>4350, do you feel that risk is currently mispriced?
Source: HolgerZ, Bloomberg
Since the VIX has so far failed to break above 20, we are now just shy of 100 sessions in which the VIX has closed below 20
The longest such stretch since October 2018 when, ironically, the market tumbled after the Fed realized it will need to be far more hawkish. Source: www.zerohedge.com
House ousts Kevin McCarthy as speaker, a first in U.S. history
This is likely to add to bond and equity markets volatility. OUR TAKE - This is a big event, at least politically. The House has no Speaker and business can be conducted until a new Speaker is installed. - There is a risk that this is an event for financial markets. The recent rise in bond yields is being driven by a lot of factors and political dysfunction is probably one of them. The US debt servicing cost has hit the inflection point for austerity at the same time basic governing is proving to be impossible. - More bond and equity markets volatility are likely Source: CNBC
Investors complacency in one chart
VIX has spent 92 sessions below 20, the longest streak since Covid, yet low implied vol regimes can last significantly longer. Source: Goldman Sachs
Options specialists seem to indicate that $SPX 4350 is the new put wall to watch
Markets & Mayhem shows that we are deep in negative gamma territory, with dealers estimated to be short about $58.41B of gamma exposure This often leads to an increase in volatility as it is more likely that dips are sold and rips are bought.
