Wall Street’s ‘fear gauge’ is flashing a warning that stocks could be about to fall off a cliff [MW]
Typically, the VIX, a popular measure of the stock market’s expectation of volatility based on S&P 500 index options, and S&P 500 index itself share an inverse correlation…. Most recently, the VIX failed to take out its highs from June as the S&P 500 logged its lowest closing low since September 2020 this week.
A similar pattern emerged as stocks fell to what were then their lowest levels of the year in June…. The VIX is [also] on the cusp of achieving a “golden cross….” In the past, these “golden crosses” have preceded sharp downturns in stocks.
Fear of Looking Political Is Making Central Banks Mess Up [WSJ]
Little of what the [Bank of England] has done since announcing £65 billion, equivalent to about $72 billion, worth of bond buying last month—a necessary measure to calm gilt markets after the British government’s ultra-expansive mini-budget—has made much sense….
It boils down to central banks’ reluctance to be seen as subservient to politicians.
[And] it isn’t a uniquely British problem…..
Hedge Fund Boss Laffont Says Coatue Still Mostly in Cash, Sees Stock Woes Ahead [Bloomberg]
The firm now has 70% to 80% of its assets in cash, Laffont said Tuesday at the Robin Hood Investors Conference in New York…. The fund has lost 18.7% this year through September.
Banks Absorb Nielsen Buyout Debt As Market Recoils [WSJ]
The banks had agreed to lead the $11 billion debt financing, planning to syndicate a $6.35 billion term loan and around $2 billion in secured debt widely to third-party investors. But ongoing weakness in the leveraged finance markets has damped investor appetite…. Banks have been facing difficulties selling debt in recent choppy market conditions. Institutions including Bank of America and Barclays would face an estimated $500 million in losses if they try to sell some $13 billion in debt they have committed to fund Elon Musk’s purchase of Twitter Inc….
A separate group of banks swallowed over $500 million in losses last month when they sold debt backing the purchase of Citrix Systems Inc. to Vista Equity Partners and Elliott Management’s private equity arm, even after agreeing to keep $6 billion of debt on their balance sheet.
Singapore’s Reopening Boom Draws Big Money and Bubble Fears [Bloomberg]
Money and people are gushing into Singapore, pushing rents and property prices to unprecedented highs, and sending the cost of a modest Toyota to more than $111,000.
Below the surface, things aren’t quite so rosy. As the government mints new long-term visas to attract more high-paid talent, it faces a delicate balancing act to keep its people happy with the cost of living surging.
The Cheapest Way to Buy Bitcoin Is Also the Riskiest. Watch the Grayscale Lawsuit. [Barron’s]
Grayscale Investments late Tuesday filed the opening brief in an effort to force the Securities and Exchange Commission to allow the firm to convert the Grayscale Bitcoin Trust into an ETF. CEO Michael Sonnenshein called the filing ” the next milestone” in the firm’s litigation. Grayscale executives have said the case is on track for a potential decision next summer.