Flat Friday on the index surface, but bonkers beta underneath.
About this episode
The episode discusses the divergent market internals in US equities, the implications of Volkswagen's layoffs, and Europe's trade policy amidst climate concerns.
Today, a look at a much zanier Friday session in US equities than the almost flat close on the S&P 500 suggested as market internals have become wildly divergent, much of it linked to the market's bucketing of AI winners and losers. Elsewhere, as Volkswagen sets up a possibly 100,000 layoffs, in part on weaker Chinese demand and greater competition from cheaper Chinese EVs, and as Europe roasts with record high temperatures, will Europe's trade policy toward coal-burning China harden on climate grounds? As usual, macro and FX and much more also on today's pod, which is hosted by Saxo Global Head of Macro Strategy John J. Hardy. Links See Friday's John J. Hardy substack, in which I discussed the AI winners and losers on the very day when market internals went especially haywire along the fault lines of this theme. A WSJ article suggests that one of China's latest AI models may match the ability to exploit cybersecurity vulnerabilities shown by Anthropic's Mythos. FTAlphaville with an excellent article wondering whether the current AI revolution may echo some of the impacts on labor and capital that marked especially the early decades of the Indutrial revolution. About twice…
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