High Beta World, Low Volatility Stock Market

For all of the happenings, the equity markets really don’t give a shit. Think about all of the nonsense we’ve had to deal with over the past 5 years and juxtapose that against a chart of the S&P 500. Nothing. The last time investors got scared was early 2016, when China was dislocating amidst a capital flight. Since then, we’ve been steadily climbing, in spite of BREXIT, Trump, potential word war and all of the other daily fuckeries we’re regularly entreated to.

Case in point, Saudi Arabia, Egypt and several other gulf states broke ties with Qatar last night, sending the Qatari markets down by 7.2%. They claim Qatar is sponsoring terrorism and they’re not gonna take it anymore. Meanwhile, Qatar has 1,000 troops in Yemen, under Saudi command, helping to rout out terror there. The whole thing makes no sense, as Qatar is a very rich country, and a very close one to the United States, historically.

European stocks are gently lower and US markets might trade down 0.2% at the open. Again, nothing.

On the plus side is gold, higher by 0.4%. Crude is weaker and the dollar is rising v the euro.

There is a total disconnect between risk and perceived risk, in my opinion — which leaves the market very vulnerable to sharp downward pin action. But I get the sense traders are afflicted with the ‘boy who cried wolf’ syndrome, because they’ve been warned so many times before and nothing has ever ‘stuck’ to the market — at least not for a very long time. Amidst all of the tumult, the major indices, led by mega cap tech, drift, inexorably, higher.

Life has never been do meaningless for professional markets skeptics.