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U.S. stocks may be well off their record highs and the VIX still elevated above 30, but in one corner of the options market downside bets are relatively cheap versus contracts that profit from the upside.
The S&P 500 skew – or the cost of bearish options versus bullish ones – is the lowest since December 2020.
Source: Bloomberg
Below is chart of the same ratio as before plotted against the S&P 500 over the last 5 years
Source: Bloomberg
The U.S. mountain states once again saw the highest inflation rates in the nation last month, with an average of 9.7%, according to data from the Bureau of Labor Statistics released Thursday. CPI YoY came in around 7.9% for the Nation.
The region, which includes Utah, Colorado and Idaho, is home to cities that have seen some of the tightest labor markets in the country and the hottest housing markets. In Arizona, Phoenix’s consumer prices soared 10.9% in February, the highest among big metro areas.
Source: Bloomberg
YTD has been a challenge for almost all asset classes. But some market sectors have proven themselves as the right tools to navigate the volatility we have been seeing in the last quarter.
The graph below shows several market groups which have outperformed and underperformed the S&P 500 YTD.
Source: Bloomberg
Global investors are fleeing Chinese shares as rising commodity inflation and geopolitical tensions further darken the country’s economic outlook. They sold a net 36 billion yuan ($5.68 billion) of mainland stocks via trading links with Hong Kong last week, the most since March 2020.
There was disappointment at policymakers’ reluctance to introduce stronger measures to reinvigorate a depressed housing market. The risk of sanctions on Chinese companies due to Beijing’s overture toward Russia also hurt investor sentiment.
Source: Bloomberg
Valero Energy Corp. and Exxon Mobil Corp. led U.S. purchases of Russian crude and petroleum products last year, potentially making them more exposed than other American energy companies to President Joe Biden’s ban on the country’s oil imports. Russia accounted for about 8% of all U.S. petroleum imports in 2021.
Biden’s executive order allows a 45-day period to wind down deliveries of existing orders, leaving plenty of time for cargoes to make the 25-30 day journey from the Black Sea to the U.S. East or Gulf Coasts.
Source: Bloomberg
Volatility measures across assets are surging as Russia’s invasion of Ukraine adds worries about surging inflation, the Federal Reserve’s tightening path and supply-chain woes.
The CBOE Volatility Index, or VIX, hit its highest since early 2021 while gauges measuring swings in Treasury options and foreign-exchange markets reached levels not seen since the peak of Covid-19 uncertainty in early 2020.
Source: Bloomberg