Well there was no easing into the week after the holiday so hopefully whatever BBQ and subsequent meats and drinks you indulged in didn’t have you too sluggish because there was no rest for the weary. The mood remains an unsure one, with a recap from our inimitable Charts guru post his 2-week roadshow in the US suggesting many investors feel the recession is already here. It’s no longer a question of if but ‘how deep’ and for ‘how long?’ That does remain to be seen but surprisingly, even with the gloomy sentiment, something is amiss in the market these days. The Treasury bond volatility measure hit a 12m high last week, the FX Vol index did the same a few weeks ago; yet we’re not seeing nearly the same from the equity side of things. That recessionary mindset seemed to be at play early on, with equities sinking across the board. But the S&P recouped more than 2.5% from early lows to finish just barely in the green. The Nasdaq had the same chart and a much higher base, finishing far ahead on the day while energy was another story altogether.
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