Strategy Video: Risk Aversion that Hits One Market Versus All of Them


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Talking Points:

• The term 'Risk-On / Risk-off' can apply to individual assets markets and regions

• Yet true changes in sentiment are measured on a market-wide basis

• Are we tipping into a period of global deleveraging or is this still just a isolated flare up

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Appetite for return and aversion to risk is a balance for each investor security and asset type. However heavy and lasting sentiment-based trends are born from market-wide beliefs. That means rather than taking cues from a single measure of 'risk' (S&P 500 Volatility Indexes USDJPY etc) we should look at the common connection of fear or greed across the spectrum. We take this big-picture view in today's Strategy Video as we assess recent flare ups in various corners of the financial system and discuss what a true sentiment trend shift would entail.

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