Exercising Caution Amid Market Euphoria | Weekly Roundup
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fellas?
It's good. It's good week. Good good month. Little little fun action out there, though. So lots to talk about. Yeah.
It kinda feels like it's a time to just, like, you know, just settle down or reset and just, like, really rethink your your, you know, fundamental views on the economy right now. That's sort of how I'm feeling. What are you guys feeling?
Weird things that have occurred in the markets, I would say, almost like imbalances because of this Trump trade that have defied, if you will. You know, parts of the market have defied maybe that some of the macro factors. Right? Because let's talk to small caps have ripped on the Trump trade as have yields in the dollar, which are usually not great for small caps. And then, you know, Nasdaq's lagged. Like, there's been a lot of things that have been a bit funky, that, you know, we're we're maybe seeing it kind of unwind a bit. Yeah.
I think it'll be really great to talk a bit about, like, what are some of these, like, more idiosyncratic factors. Because to me, it felt like, okay. Like, the context of the last month was like, alright. You know, this this uncertainty premium got baked into the market, and and and, you know, that whole thing happened. We've been talking about this for the past month, looking at VIX and move. And then we had the the election result that was, basically, you know, like, no no contesting for any of that or anything. So then we had this huge unwind of vol, this big unwind of positions, this big r
Today, specifically, on the the volatility stuff, I think the VIX is up, what, 18% right now. The 9 day VIX is up 23%. This today, the options expert is one of the biggest ever. So I think what you're seeing is people sold yesterday, and then they're buying, you know, month out protection, which is why the market's so weak today. But I don't know. You head into December, not much really happens. You know, you have the fed, but the the volumes are low. You're in this seasonally really strong period of buybacks. So I think after today, we'll probably see the the vol roll off because and I have a
Yeah. Agreed. Why don't we just start with talking about the Fed situation right now? Because, you know, yesterday, we actually had an interesting interview from Jerome Powell. This is his first time talking since, the previous FOMC meeting. And I don't know. I I I read the I read the the main interview transcript of it, and there's a couple interesting points. But the main thing that got highlights moving was, this tweet from Nick Timmeros just sums it up. But we're moving policy over time to a more neutral setting, but the path we're getting there is not preset. The economy is not sending an
I thought the yesterday's Powell's talk, as you pointed out, was not that, groundbreaking relative to the new information we received. I mean, we received 2, you know, in line with expectations generally, but but sticky and increasing inflation prints this week with CPI and PPI. So, obviously, he's g
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