Macro & Volatility™

Equity rally is broad, earnings-driven, and still not stretched Markets can tolerate higher rates until speed becomes the risk AI capex is creating a sustained, structural inflation floor

Equity rally is fundamentally earnings-driven, not war “denial” Excessive hedging mispriced the upside Bonds are selling off because inflation is shifting from short-term to structural

Convexity conundrum: diversifying assets didn’t work Commodities are not tariffs and cannot be altered at the stroke of a pen Tape bombs are having diminishing impact

More about rotation than direction Bonds are still not protecting Implied correlation / VIX is at a record low

Healthy correction in gold and silver Higher nominal rates globally Warsh’s impact on the MOVE and VIX

Ready, Shoot, Aim Fed Misunderstanding of Oracle CDS Welcome back to the ‘90s

Long Vol and long Delta Paid to be long Correlation Buy Everything!

Risk-on sentiment is reinforced by accelerated global earnings Markets go up... volatility goes up The Magnificents’ P/E-to-expected growth is favorable — not true for the Everything Else Cross-asset correlations are already historically high — a short hop to “1” Gold is expected to move higher, driven by global populist monetary and fiscal stimulus

• Surprise — no surprises • Front end is clear • Back end is lost

US Dollar allergy & US Treasury curve illness Tipping point for US Dollar weakness Risk appetite still going strong!

The winners, the losers, and the in-betweens Old economy vs New economy CapEx Trump has Made Europe Great Again (“MEGA”) US De-globalization is leading to Global De-correlation

Realized volatility did the heavy lifting Trade (“Cold”) War discount Pace of news flow will slow

What does Liberation Day mean for inflation? Bonds and the Fed are pointing to growth contraction and moderate stagflation Tail-hedging didn’t work Trump Put is very different than the Fed Put

The bond market says ... What's driving the yields? The VIX continues to be higher for longer

CEO FOMO, 30 years later. Using lessons from the past to understand risk today. A key difference in valuations, then and now.

CEO FOMO, 30 years later; Using lessons from the past to understand risk today; A key difference in valuations, then and now

The US political risk premium. Market corrections could be violent. Upside may be limited by PE contraction; downside may be limited by two Trump puts.

Rate volatility will likely be higher for longer. Elevated rate volatility means higher mortgage rates. High mortgage rates will contribute to higher inflation.

Fleeting competition for gold. Gold strength continues despite dollar range, elevated rates, and low vol. Silver can catch up.

Options Markets point to risk-on with a higher VIX through year-end. In China, right tail is bid. The AI rotation may benefit China and, derivatively, Europe.

The Fed is data driven, is the bond market? What usually calms the market? What will calm this market?

Third derivative has impacted market structure Who bailed out short vol and dispersion traders? Bonds did their job, but do they have the juice to do it again? Will Dual Goldilocks prevail?

Josh and Michael discuss whether the Rotation Trade is sustainable, if Russell is the right bedfellow and if thematic pairs trades are riskier than long indices.

Collecting equity risk premium is profitable Inflation after November 5th Insurance is cheap!

Josh and Michael discuss how FX volatility is not reflecting the same political concerns as French bonds, skew as a better indicator of risk than volatility in FX and how the VIX is low but the IV-RV spread is high in the US.