S&P 500 Options Showing Little Fear Over Trump Policy...For Now
- Smoothness of term structure mirrors pre-election complacency
- Bond volatility relatively higher as uncertainties abound
Morning Meeting: VIX and the Trump Reflation Trade
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S&P 500 options are showing little anxiety over Donald Trump’s policies over the next few weeks, even as rates options capture concerns, according to Bloomberg strategist Tanvir Sandhu.
The smoothness of S&P 500 Index’s volatility term structure indicates complacency in factoring in policy shifts by the government, reminiscent of a similar formation three weeks before the U.S. election on Nov. 8 when opinion polls overwhelmingly predicted a Hillary Clinton win.