Equity Volatility to Stay Subdued Until Year End: SocGen

The discussion with Gen. Jitesh covers the current state of low equity volatility, driven by strong corporate profits and economic health. The conversation explores potential changes in volatility due to market positioning and future economic shifts. Factors such as corporate health and economic backdrop are highlighted as key influences on volatility. The current market positioning favors low volatility, with strategies like short wall trades being popular. The outlook suggests that volatility will remain low for the next few months.

What is the primary reason for the current low volatility in US and global equities?

• High inflation rates

• Strong corporate profits

• Political instability

• Increased interest rates

What is the relationship between corporate profits and equity volatility?

• Varies with market conditions

• No correlation

• Negatively correlated

• Directly correlated

What are the two main factors that could lead to increased market volatility in the future?

• Interest rates and inflation

• Political events and trade wars

• Corporate sector health and economic policies

• Economic fundamentals and market positioning

What is the current market strategy that is benefiting from low volatility?

• Currency hedging

• Long volatility trade

• Short volatility trade

• High-risk investments

How long is the current low volatility expected to last according to the discussion?

• Over a year

• 3-4 months

• 1-2 months

• 6-7 months