Events that could trigger more market volatility

Five charts to start your day

The customary August lull has been shattered by a palpable sense of unease. My first day back in the office last Monday was met with a sea of red. I’ve been writing notes on what has happened ever since.

The whispers of an impending recession have grown louder. Tech stocks, once the darlings of the market, have faced increased scrutiny as the AI boom raises questions of overvaluation. Meanwhile, the US Federal Reserve's tightrope walk between taming inflation and avoiding economic contraction has kept everyone on edge.

What seems to have set off this bout of volatility, in my opinion, is the combination of two trades unwindings: the yen carry trade and the US equity dispersion trade. You can read the note I wrote about this here.

But for now, take a look at this chart that was published last weekend in the FT. It shows the forward implied volatility of the S&P 500 index, highlighting key upcoming dates that might trigger more volatility.

The market is focused on events like the CPI data release, the Jackson Hole meeting, NVIDIA's earnings results and payroll data. A bad reading from any of these could have a significant effect on market volatility.

Source: Financial Times

Coming up:

• Funds offering protection from volatility fail to deliver

• The Magnificent Seven are larger than the Chinese stock market

• Size doesn’t always count in the Fast Food industry

• Different types of balls in the Olympics

If you like the sound of that line up, this is usually a paid newsletter. You basically get all my best ideas daily. Hit the subscribe button if you are interested and this will be sent to your inbox daily.