VIX - What a difference a couple of tweets make. While investors were wondering if they were in for another period of extreme market calm, like in 2017, and hedge funds had just ratcheted their short volatility bets to the highest in history, volatility spiked as US President Trump threatened to hike tariffs on Chinese imports as early as Friday.
With a meaningful trade deal between China and the US highly unlikely this week, the odds are that volatility will remain with us for a while longer, especially given the slow and shallow global recovery to date. Therefore, a more neutral stance on risky assets seems appropriate for now.