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TME on the crash under the boom.
The great volatility disconnect
Something unusual is happening beneath the surface of equities. Defensive sectors are showing bubble-like behavior, US earnings moves keep exceeding what options price in, and Europe is paying up for volatility that rarely materializes. Meanwhile, the semiconductor washout is creating interesting upside opportunities, while AI weakness is increasingly trading like a growth shock. BofA’s latest work reveals a market where the biggest risks aren’t necessarily where investors are paying to hedge them.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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