China Trade Uncertainty Causes VIX To Fall By 18.7 Pts, Largest In History (Correlation Between Stocks And Bonds Reverse To Positive)

#bubble, #inflation, China, CMBS, CRE, Credit, Currency, ECB, Economy, Existing Home Sales, Fed, GDP, Gold, Housing, Inflation, New Home Sales, Oil, Pension, Powell, REITs, Silver, SPX, Stocks, Trade, Treasuries, Treasury, Uncategorized, VIX, Volatility, Wages, Yellen, Yield Curve 1 Minute

Obama/Biden/Harris/Schumer/Pelosi have let the US be the punks for China. Trump is simply trying to level the playing field and China’s Xie doesn’t like the new equilibrium.

VIX Index fell by 18.7 points yesterday … largest one-day decline in history.

The correlation between stock prices and bond yields has returned to positive territory — hinting at a period of distress in equities and a regime shift in equity and bond markets where recession fears, rather than inflation, may be starting to drive direction of both. The correlation between the two asset classes was positive for the better part of 20 years prior to the pandemic, suggesting equities trended in the direction of yields as inflation mostly coincided with growth. Stocks held a negative correlation to yields throughout most of the 1980s and 1990s, when inflation hurt stocks — and that phenomenon returned for the 2022-24 bear market and recovery period.

Notably, major stock corrections occurred each time the correlation jumped out of its primary regime.

China’s Xi flashes a Hitler salute!

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