The report analyzes the current state of the S&P 500, noting narrow leadership and record low volatility skew as investors head into summer. It highlights significant hedge fund buying and rotations into financials while warning of the rapid growth in single-stock ETFs.
Key Takeaways
- 1.Market leadership is historically narrow, with the top 10 S&P 500 weights comprising 40% of the index.
- 2.Volatility markets show a lack of fear despite bearish headlines; SPX vol skew is at an 18-month low.
- 3.Hedge funds are net buying at the fastest pace YTD, specifically rotating into financials and out of industrials.
Table of Contents
- three of the (many) bear arguments
- three of the (many) observations from the vol desk
- trades
- watch this week
- pb (i)
- pb (ii)
- 1delta
- futures
- derivs
- etfs
- baskets
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Authors
Brian Garrett
Securities
SPXNDXRTYRSPVIXAVGOCRWD
Themes
Narrow Leadership and Concentration RiskVolatility SkepticismSingle-Stock ETF Proliferation
Regions
GlobalNorth AmericaUnited States