Mon Apr 28 2025

In six short trading days from 4/2 to 4/9, the SPX realized as much vol as it did during the ENTIRE year of 2024. The protracted risk-off that began with the “Liberation Day” fallout ranks only behind Covid and the GFC in terms of severity using data going back to 1990. While we've likely moved past peak VIX, in the aftermath of recent chaos is an overhang of uncertainty that may hamper critical decision-making. I see plenty of lingering uncertainties - from the uneven communication from the WH, from the unpriced reactions of our trading partners and from how the market will need to price in the potential economic and corporate profit fallout from the last several weeks. Unfortunately, the recent period has been a totally unforced exercise in negative branding for both the dollar and US government bond market. For the VIX to run to 50 and for duration not to rally concurrently is a bad outcome, amounting to an asset pricing taste test that went poorly. Scott Bessent and Company...