Yesterday, I talked about negative real mortgage rates and BB corporate yields. Now we have this little diddy: SKEW just surged.
The SKEW index is a measure of potential risk in financial markets. The SKEW index can be a proxy for investor sentiment and volatility. The Skew Index measures perceived tail-risk in the S&P 500. Tail-risk is a change in the price of the S&P 500 or a stock that would place it on either of the tail ends, or the far edges of the normal distribution curve.
And it is the highest since 1990.
Historically wild government spending and Fed monetary policies have created a “fear” scenario for investors.
Fear is here!