Index Hedging Jumps, But Stock Optimism Persists
Implied volatilities have increased across various asset classes as bond yields rose due to heightened inflation expectations. Despite this rise in volatility, there remains a strong sense of optimism in the stock market. Investors continue to show confidence in equities, indicating a potential divergence between market sentiment and underlying economic indicators.
- ▪Implied volatilities gained across asset classes last week.
- ▪Bond yields spiked on higher inflation expectations.
- ▪There is persistent optimism in the stock market despite rising volatility.
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