April has been another lousy month for front running volatility nerds. The VIX has been range bound between 17 and 12 which is nearly half the value from the top of the range in January. Equities have been supported by a variety of central bank chatter though many of the tech stocks such as AAPL and GOOG look to have some serious price fatigue. Negative rates are ultimately a sick cousin which may infect the notion of central banks being able to cure all that ails the markets. If things are getting better how come the world needs negative rates?
The Fed believes it can lead rates higher just as boldly as it aggressively accommodated lower rates in the worst of the 2009 to 2014 economic down draft. Equity prices however are not cheap and several keys to growth such as real estate are looking as if they are ready to heave into another leg lower. There has been a fundamental shift in opportunity growth in the U.S economy and it has had a direct negative impact on the largest investment in most peoples lives, their homes.
