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PARALLAX VOLATILITY ADVISERS TAIL HEDGING PLUS
PARALLAX VOLATILITY ADVISERS TAIL HEDGING FREE
PARALLAX VOLATILITY ADVISERS TAIL HEDGING TORRENT

II) February New Single Family Home sales plunged by 18.2% to 775,000 units on a seasonally adjusted annual basis.

PARALLAX VOLATILITY ADVISERS TAIL HEDGING FREE

The restrictions were implemented as the US economy was in free fall, and the Fed wanted banks to conserve their capital in case the economic damage caused by the coronavirus pandemic worsened.

Russell 2000 -2.88% MTD +1.01% YTD +12.71%ĭrivers: I) The Federal Reserve stated temporary restrictions imposed last summer on bank dividends and share repurchases would cease for most banks on June 30, depending upon the outcome of each bank’s annual stress test results.

US equity markets mostly rallied last week as weekly Jobless Claims hit their lowest level since the start of the pandemic, and the Fed lifted restrictions to enable banks to increase their dividends and buy back stock. The UE rate is forecast to drop by 0.2% to 6.0%. The improvement is due to a combination of fiscal stimulus, warmer weather and improving outlook for COVID-19 related conditions. The Non-Farm Payroll report on Friday is expected to show a strong increase of 650,000 for March, following the 379,000 jump in February. Later in the morning, the ISM Manufacturing Survey is estimated to have risen 0.7 points to 61.5 in March. due primarily to the severe winter weather seen during the month. On Wednesday, Pending Home Sales in February are projected to have declined by 7.0%. Consumer confidence has risen due to vaccine distribution and the recent round of stimulus checks. We start off on Tuesday with the March report for the Conference Board Consumer Confidence Index, which is expected to improve by 6.7 points to 98.0. In looking ahead to the economic calendar next week, a busy schedule will be highlighted by housing, consumer, and employment data releases.

PARALLAX VOLATILITY ADVISERS TAIL HEDGING PLUS

On the plus side, the US with its $1.9 trillion stimulus injection, prospects for a potential $3 trillion infrastructure spend, and increased projection for the number of vaccine doses deployed from 100 to 200 million has provided hope the US will see a sharp increase in growth that will boost global growth in turn. Asian markets have been negatively impacted by the confrontational tone seen during the recent US/China talks, the SEC’s call for accountability of non-US companies listed on US exchanges to provide verifiable audit reports, and China’s recent crackdown on Chinese mega companies for monopolistic practices.

The sober tone has been exacerbated by the slow rollout of the Astra Zeneca vaccine, which have led economists to fear a deeper than expected recession in Europe for Q1.

A weekly rise in new cases of 13% in the UK (D117 variant), 27% in France and 67% in Germany have led to new mini-lockdowns. The Euro-zone and the US saw a recent spike in COVID-19 cases, with a “third wave” deluging Europe. Heading into next week’s holiday shortened trading sessions, asset prices will be subject to a tug of war between vaccine and geo-political issues versus fundamental factors. Conversely, bonds are confronted with the reality of rising rates, prompted by the mounds of debt being issued by central banks, the measured rise in inflation, and the inevitable reversal of monetary policy that will include a rise in short rates and the long-feared move towards “tapering”.

PARALLAX VOLATILITY ADVISERS TAIL HEDGING TORRENT

These divergent trends should continue over the next 12 months, as equities will have a torrent of tailwinds including massively accommodative fiscal and monetary policy, historic levels of cash, and rapidly accelerating economic and corporate earnings growth.

The parallax view of the bond market, has us bidding farewell to its bull run that began in 1981 and ushering in a bear market, as the BloombergBarclays US Long Term Treasury TR Index (maturities 10 years +) is 20% lower than its March 2020 peak. The other equity indexes have also seen strong rises, with the DJIA up 76.7% and the Russell 2000 higher by 121.1%, while commodities have advanced with WTI Crude up 160.9% and COMEX Gold higher by 9.3%. The S&P 500 is up 76% over the year, and only twice in history has the benchmark index posted a similar 12-month surge (in 1936 up 80% and 1933 up 75%). Equities have enjoyed a 12-month bull run that has seen historic performance from the major stock indexes. Last week marked the one-year anniversary of two divergent trends that began on March 23, 2020, between the equity and fixed income markets.