| | | | | | | March 12, 2025 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Wall Street's 'fear gauge' surged past a key level this week - what it says about the S&P 500 through year-end
Isabel Wang - MarketWatch
The Cboe Volatility Index - known as the VIX or Wall Street's "fear gauge" - has surged over 60% so far this year to trade above 27.3 earlier this week. This is a "statistically unusual level," and history suggests that if it is surpassed multiple times in a year, it could mean trouble for the U.S. stock market, according to DataTrek Research.
The table above shows that, since 1990, there have been 19 years in which there was at least one VIX reading above 27.3. In seven of those years, the S&P 500 saw negative returns, and not coincidently, those were the only down years in that period, said Nicholas Colas, co-founder of DataTrek Research.
/jlne.ws/4iqhyRT
Volatile Trading Leaves US Stocks on Doorstep of a Correction
Esha Dey - Bloomberg
A fresh flurry of trade-policy headlines touched off another volatile trading day on Wall Street, with the S&P 500 Index's three-week selloff briefly reaching 10% before a late rally pared the drop.
The equity benchmark ended lower by 0.5%, after earlier falling as much as 1.5%. That had it on track to meet the accepted definition of a correction, which would be the first since late 2023. It is now trading at 5,572, compared with the record closing high of 6,144.15 it hit last month. Technology behemoths Apple Inc., Nvidia Corp. and Alphabet Inc. were among the biggest contributors to the index's losses on the session. The tech-heavy Nasdaq 100, which entered its own correction on March 7, fell 0.2%.
/jlne.ws/4kNnWEe
Tariffs are causing stock-market panic and leading investors into riskier options trading; Volume in S&P 500-linked contracts hit a record on Monday. Activity has been particularly intense in '0DTE' options, which some have likened to 'lottery tickets.'
Joseph Adinolfi - MarketWatch
Less than two months into his second term, President Donald Trump is already making stock-market volatility great again. That's been a boon for the options market.
As U.S. stocks have slumped, options-trading volumes have soared, according to data from Cboe Global Markets, a major U.S. options-exchange operator.
/jlne.ws/421NGWe
Wall Street Left Dazed and Confused as Trump Jolts Markets Again
Carmen Reinicke and Jess Menton - Bloomberg
It was just after 10 a.m., a half hour after the opening bell, and the S&P 500 Index had started to steady from the fear-induced selloff that swept across Wall Street on Monday.
Then President Donald Trump took to Truth Social and fired off another broadside in his trade spat with Canada, jolting traders and sending stocks lurching downward again.
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The $5 Trillion Stock Wipeout Is Rattling America's Big Spenders; Americans who have propped up consumer spending are the most likely to feel the sting from the recent bout of market losses. Some are already making plans to cut back.
Claire Ballentine, Bailey Lipschultz, and Charlie Wells - Blooomberg
It's never been easier for everyday Americans to trade stocks. And, for the past two years, that's largely meant one thing: making money.
On platforms from Fidelity to Robinhood to Coinbase, almost everything seemed to come up green in 2023 and 2024. The S&P 500 gained more than 20% in both years and favorites of retail investors, like Nvidia Corp. (+819%), Tesla Inc. (+228%) and Bitcoin (+467%), surged along with any number of ultra-leveraged funds.
/jlne.ws/3DDlNub
JPMorgan Quant-Cloning Factory Churns Out $100 Billion of Trades
Justina Lee - Bloomberg
A JPMorgan Chase & Co. quant unit has amassed a $100 billion derivatives-powered trading book, offering hedge fund-like investing on the cheap to investors of all stripes. The bank's Strategic Indices business has been at the forefront of the boom in what are known as Quantitative Investment Strategies, or QIS, which turn well-known systematic trades into swaps or structured notes - making copycat products that are easier and more cost-effective to deploy. QIS have been a hit with the likes of insurers and pension funds for providing classic hedge fund-style exposures such as trend following and options selling at a fraction of the cost. And lately even the fast money - once-hostile to these competing investing products - has been warming up to the strategies.
/jlne.ws/4iJFa3A
Hedge funds slash bets as Trump's trade war causes 'a lot of pain'; Managers' favourite stocks tumble as market volatility surges
Costas Mourselas and George Steer - Financial Times
Hedge funds have slashed their bets on equities and cut their borrowings from banks as they struggle to deal with surging market volatility triggered by US President Donald Trump's global trade war.
A sharp stock market sell-off in recent weeks on concerns about Trump's tariffs has hit the sector particularly hard. Goldman Sachs' Hedge Industry VIP index, which tracks funds' most popular buys such as ad group AppLovin, chipmaker Broadcom and energy group Vistra, has tumbled 12.5 per cent since February 19 - when the S&P 500 hit a record high - compared with an 8.6 per cent drop in the blue-chip index.
/jlne.ws/41NbUlG
ECB Facing 'Exceptionally High' Levels of Uncertainty, Lagarde Says; The speech came after the EU announced retaliation measures to the U.S.'s imposition of 25% tariffs on all steel and aluminum imports
Paul Hannon - The Wall Street Journal
The European Central Bank is confronting a new, more volatile world in which it must combine agility in responding to shocks with clarity in outlining how it is likely to react to a range of possible outcomes, President Christine Lagarde said Wednesday.
In a speech at an annual conference that brings together economists who follow the central bank closely, Lagarde said that policymakers face "exceptionally high" levels of uncertainty.
/jlne.ws/4ioQFxA
| | | | | | Exchanges | | | Exclusive: Terry Duffy on CME's cloud future, takeover targets, and ... candy; CME CEO Terry Duffy explains the relatively narrow strategy that the derivatives exchange has taken under his leadership, especially compared to its peers.
Rebecca Natale - Waters Technology
Over the better part of an hour, Terry Duffy shows himself to be personable but guarded. He has no social media presence. He's a believer in timing-at least 50% of success is owed to it, he says-and he's a sometimes-viewer of the History Channel's The Food That Built America. An episode he watched recently delved into the story of Curtiss Candy Company, a Chicago confectionery business founded in 1916 by Otto Schnering, who gave the store his mother's maiden name to elude anti-German sentiment
/jlne.ws/3Fjrcr3
CME Group to Launch Bloomberg Commodity (BCOM) Subindex Futures on March 31
CME Group
CME Group, the world's leading derivatives marketplace, today announced plans to launch Bloomberg Commodity (BCOM) Subindex futures on March 31, pending regulatory review. BCOM Subindex futures will be available across seven leading commodity index sectors, providing investors with the ability to express their views around sector-specific asset volatility on their portfolios, including:
/jlne.ws/3XNCObV
| | | | | | Regulation & Enforcement | | | Crypto's New Regulatory Era Means Fresh Opportunity for ETFs
Vildana Hajric - Bloomberg
Cboe BZX Exchange Inc. is asking regulators to open the door for staking on a number of Ether-based exchange-traded funds, joining another platform in the race for investors to potentially earn passive income on their crypto holdings.
Cboe's filing this week with the US Securities and Exchange Commission is appealing for the approval of staking for Fidelity's Ethereum Fund. The company had previously submitted similar paperwork for the 21Shares Core Ethereum ETF. Another exchange, NYSE Arca Inc., has asked regulators for the staking option on Ethereum products from Grayscale Investments.
/jlne.ws/4iHr7LQ
Crypto's New Regulatory Era Means Fresh Opportunity for ETFs
Vildana Hajric - Bloomberg
Cboe BZX Exchange Inc. is asking regulators to open the door for staking on a number of Ether-based exchange-traded funds, joining another platform in the race for investors to potentially earn passive income on their crypto holdings. Cboe's filing this week with the US Securities and Exchange Commission is appealing for the approval of staking for Fidelity's Ethereum Fund. The company had previously submitted similar paperwork for the 21Shares Core Ethereum ETF. Another exchange, NYSE Arca Inc., has asked regulators for the staking option on Ethereum products from Grayscale Investments.
/jlne.ws/4iHr7LQ
| | | | | | Technology | | | Miami International Holdings and The Bermuda Stock Exchange Launch New Trading and Settlement Technology Platform
MIAX
Miami International Holdings, Inc. (MIH), a technology-driven leader in building and operating regulated financial markets across multiple asset classes, today announced the launch of a fully-integrated trading, clearing, settlement and depository technology platform for The Bermuda Stock Exchange (BSX), a wholly-owned subsidiary of MIH.
/jlne.ws/4iIPZ5U
| | | | | | Strategy | | | Trump Is Remaking Markets. Is 'Buy the Dip' Dead?
Steven M. Sears - Barron's
History will ultimately decide if President Donald Trump made America great again, but this much is certain: He's made volatility great again.
/jlne.ws/4iKquRN
Traders Ramp Up Bets on Fed Rate Cuts as Recession Angst Builds
Edward Bolingbroke - Bloomberg
Traders in the futures and options markets are loading up on bets the Federal Reserve will have to lower interest rates this year by more than expected because of the Trump administration's aggressive policy agenda.
The tough talk on tariffs out of Washington has pushed investors toward haven assets such as Treasuries, which are poised to become more attractive if recent signs of economic trouble keep building. The rising possibility of an economic downturn fueled fresh demand for both short- and long-dated Treasury futures on Monday.
/jlne.ws/41NTZeG
Ominous market signals show more trouble could await US stocks
Lewis Krauskopf and Suzanne McGee - Reuters
Investors are wary about worrisome market signs, after a steep U.S. stocks selloff that has wiped out more than $4 trillion in value and all of the gains notched following President Donald Trump's election.
Among the signs are technical signals such as the S&P 500 on Monday closing below a crucial trend line, a key measure of the market's internals weakening, a concerning pattern in volatility futures contracts, rising cash levels among investors and de-leveraging by hedge funds away from equities.
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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| | | Jeff Bergstrom
Editor
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