Gina Martin Adams, chief market strategist at HB Wealth, points out that every single hyperscaler has been through a bear market over the past year, and nobody talks about it because the index kept rising. She also thinks the danger zone for stocks has moved higher, from 5% on the 10-year toward five and a half.
Amy Wu Silverman, head of derivatives strategy at RBC Capital Markets, tells Kenny Polcari why volatility looks calm when it is not: the rotation cancels itself out. Her worry is the day correlation picks up, and almost nobody is hedged for it.
Timestamps
0:00 Near new highs, with nerves underneath
0:55 The bull is intact. The bond market is not
1:34 The bond market is doing the Fed’s job again
2:12 Why Martin Adams thinks the danger zone moved higher
2:38 Earnings went from 12 to 15% up to 20 to 30%
3:01 Five and a half, maybe six, and the 1990s comparison
3:27 A generation that has only ever known zero rates
4:07 Two habits this generation always comes back to
4:39 Rotation, not liquidation, and where the money went
5:24 The paddling duck: why VIX looks smooth
6:22 What happens the day correlation picks up
7:05 Nobody is hedging, and protection is inexpensive
8:54 The stock-bond correlation broke in May
11:46 The crowded trade, and Nvidia’s 20% correction
12:25 Every hyperscaler has had a bear market
12:36 Silverman on the divorce from the Mag 7
14:01 The surge protector plugged into itself
14:50 One shortfall subjects the entire trade
16:04 Half a turn of leverage, against the railroads’ three
17:29 Nvidia raising prices to the hyperscalers
18:04 Is the Treasury right to fight the long end
18:49 Jackson Hole, and why they both expect a dodge
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