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Market Volatility

Herky Jerky Markets Mean the Fed Put is Back
FOMC Updates

Herky Jerky Markets Mean the Fed Put is Back

Recent market volatility spiked due to a soft labor report and geopolitical risks, with the VIX experiencing one of its largest spikes ever. The rapid recovery suggests that immediate panic may be over, and the Fed’s flexibility to cut rates could stabilize the market further. However, tensions in the Middle East could reignite volatility. Investors should stay cautious and use strategies to manage risk while capitalizing on more stable volatility levels.

Three Things the Stock Market Can Tell Us About Elections
Black Swan Party

Three Things the Stock Market Can Tell Us About Elections

Geopolitical risk events are often non- events for markets. The market cares only for the almighty ask and bid. By removing emotion from evaluations, stock analysis adds objectivity. Historical data shows the stock market tends to perform better under Democratic Presidents and that incumbents are likelier to win if the market is positive before elections. Understanding these patterns can offer valuable insights as we approach an emotionally charged election season.

Volatility Likely to Spike from Rising Middle East Tensions
Black Swan Party

Volatility Likely to Spike from Rising Middle East Tensions

“Volatility is a symptom that people have no clue of the underlying value,” says Jeremy Grantham. Last week, we saw a spike in volatility, but the orderly nature of the sell- off and the VIX curve remaining in contango suggest it wasn’t the start of a bear market. With earnings season approaching and strong performance from the Russell 2000, the market shows resilience. Despite geopolitical tensions and potential risks, the current market structure and economic fundamentals point to a more stable outlook.

How Does the Presidential Election Affect Market Volatility?
Black Swan Party

How Does the Presidential Election Affect Market Volatility?

“Quite a few ‘old adages’ regarding markets and politics are plainly false,” says Thomas Jefferson. Contrary to belief, markets perform better under Democratic presidents. Misunderstandings about market volatility can affect strategies. Analyzing election year patterns reveals opportunities, suggesting that shorting October volatility might be profitable despite uncertainty. Understanding politics and markets is key to effective investing.

Why Yesterday’s Volatility Spike Should Be Shorted
Black Swan Party

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, high...

Sangfroid (Don’t Assess Risk Like a Fish)
Black Swan Party

Sangfroid (Don’t Assess Risk Like a Fish)

“Dark clouds are gathering,” warns Barton Biggs, and the market’s misconceptions about volatility could prove costly. Welcome to the Black Swan Party, your bi- weekly dive into the unthinkable and the highly unlikely. As the Ukrainian offensive ramps up and geopolitical tensions rise, the market remains eerily calm. Understanding and navigating financial volatility is crucial for managing money effectively. Volatility isn’t just a threat; it’s an opportunity for discerning investors. This column explores...

Debt Ceiling Blowup Could Imperil 60/40 Portfolio
Black Swan Party

Debt Ceiling Blowup Could Imperil 60/40 Portfolio

“We’re entering an era of higher market volatility, which has significant implications for the 60/40 portfolio,” says Wei Li, BlackRock Global Chief Investment Strategist. With the US debt ceiling fight looming and political polarization high, market anxiety is rising. Despite historical odds suggesting a rebound, new risks like geopolitical tensions, inflation, and economic policy shifts could challenge the traditional 60/40 investment strategy. As we navigate this volatile landscape, investors must pre...

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