Economic Conditions

Why Yesterday’s Volatility Spike Should Be Shorted

“Volatility is a symptom that people have no clue of the underlying value,” says Jeremy Grantham. Understanding volatility’s patterns is crucial for navigating market fluctuations. Despite recent spikes, volatility often reverts to its mean and clusters around certain events. Current economic conditions, such as strong labor markets and subdued inflation, suggest that volatility may remain lower than expected. Yesterday’s market movements, driven by a mix of relief rallies and geopolitical concerns, highlight the complex but ultimately bullish landscape ahead.