November was a volatile month for Domestic Equity Markets, with the S&P 500 whipsawing like a roller coaster prior to and then immediately following the US midterm elections. The beginning of November saw a 6.3% rebound from October lows, followed by a -6.4% move lower and finally a 6.0% leg higher with market flows switching from bullish to bearish and back to bullish again. The risk-off trading activity was led mostly by FAANG names, driving the Nasdaq 15% lower at the lows and realized volatility through the roof. This sentiment seemed to permeate across asset classes with signs of stress beginning to show through via widening of credit spread and spike in commodity volatility driven by energy. In fact, CDX IG & HY 5Y spreads have widened significantly with an increase in SPX beta to credit spreads suggesting investors finally awakening to the implications of deteriorating credit markets. Through November 28th the narrative that bonds have peaked combined with equities nearing the end of the cycle had most investors positioning for a shift to a higher risk & higher volatility regime. All of that seemed to be true until Fed Chairman Powell reminded everyone of the power of the “Central Bank Put” sending equity markets sky-rocketing and volatility crashing down to end November positive on the month. There are a number of credible platforms which helps you to manage hedge funds NYC through effective volatile strategies.
European volatility continued to under perform other regions with SX5E volatility virtually non-existent. We believe part of the reason may be a pick-up in EUR fluctuations due to Italy disagreements along with Brexit-related concerns weighing heavily on GBP meaning that FX moves may have soaked up most of the volatility in the Eurozone over the month. The finest platform combines diversified alpha strategies and robust risk management to manage volatility hedge funds separately.
Many investors believe a shift to a higher risk regime for Asian markets is on the horizon, hence the importance of owning efficient tail hedges. However, with a potential end to the Trade War with China in sight following President Trump and President Xi’s recent meeting at the G20 summit in Argentina, on the surface it appears as if volatility will remain suppressed and markets buoyed for at least the 90-day window postponing further escalation. Once you get to measure volatility mutual funds, you can withstand with all kinds of adverse conditions.
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