2022.01.17 Weekly notes

  • World Economic Forum: Expect 3 more years of consistent volatility, uneven recovery (YahooFinance)
  • Market may see intermittent volatility this year (Financial Express)
  • PIMCO predicts steeper US yield curve, more volatility in 2022 (Reuters)
  • Whipped-up Nasdaq volatility is new gut check for bottom feeders (Bloomberg)
  • Morgan Stanley, BNP Brace for Return of Currency Swings (Bloomberg)
  • Traders Brace for Higher Volatility; Altcoins Underperform (CoinDesk)
  • Inflation Figures and Volatility Expectations Confront Investors (PlanAdviser)
  • Why Have Stocks Been So Volatile? (Morningstar)
  • Apple stock is a ‘place to hide’ amid volatile markets (MarketWatch)
  • How To Survive Volatility In 4 Simple Step (SeekingAlpha)
  • 3 of the Best Growth Stocks to Buy After the Recent Volatility (TheMotleyFool)
  • Top 5 Momentum Picks for January Despite Market Volatility (YahooFinance)
  • Lumber volatility hits 75-year high as inflation soars (National Mortgage News)
  • Historic U.S. Gas Rally Sours in Single Day as Volatility Soars (Bloomberg)
  • Expect continued volatility in airfreight market (Supply Chain Quarterly)
  • Volatile supply chain tightens grip on aviation industry (AOPA)
  • Traders fear volatile metal prices ahead of Winter Olympics (Telegraph)
  • Why CRE Insurance Prices Are Becoming More Volatile (GlobeSt.com)
(Brent Donnelly’s typical AMFX sign-off)

LAST WEEK’S ACTION

EQUITIES

S&5500 (L), NIFTY50 (R)
MSCI World (L), World ex-US (R)
MSCI Developed markets (L), Emerging markets (R)
20/50/100/200 SMA’s of VVIX

COMMODITIES

https://allstarcharts.com/wp-content/uploads/2022/01/image130.png

RATES

FOREX

There’s been quite a few instances of perplexity and confusion recently on why certain currencies and pairs have not reacted to cross-asset moves in their usual manner, almost as if in a state of shock with little directional conviction. It would seem this was all positioning related particularly in view of USD longs being very crowded. A Bloomberg piece citing MS and BNP suggests FX volatility will likely follow the elevated interest rate volatility…

Morgan Stanley, BNP Brace for Return of Currency Swings

TRADE VIEWS/IDEAS

A quick summary of the above that shapes my views for the week:

  • Equities both technically and fundamentally is looking increasingly weak, while volatility is gradually increasing;
  • Commodity positioning is looking stretched and vulnerable to mild capitulations in risk;
  • Higher US real yields and potential underpricing of Fed hikes is likely to produce more rates volatility and stronger USD;
  • DXY technicals making a strong case for the bounce.

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