Stocks Are Breakdancing, But the Market's in Zen Mode

The stock market looks steady on the surface, but don’t be fooled

Feb 18, 2025

Hey Investorean,

The stock market looks steady on the surface, but don’t be fooled—it’s more like a quiet lake with unpredictable currents below.

📊 The S&P 500 is up 4% this year, but that masks some major shake-ups—Chinese AI developments and Trump’s tariff war are rattling investors. Yet, the market’s fear gauge (VIX) remains surprisingly low.

🤯 What’s really weird? While the S&P 500 stays relatively stable, its individual stocks are all over the place. The "Magnificent Seven" tech giants are down 2.7% since late January, but within that group, Alphabet dropped 7.5% while Meta soared 13.8%!

🚨 Why does this matter? If this wild dispersion unwinds, the S&P 500 could take a serious hit. Traders are betting big on single-stock volatility while suppressing index movements—a strategy that works until it doesn’t. Remember the 2018 “Volpocalypse”?

💡 The takeaway? With the market looking pricey and volatility brewing beneath the surface, having some bonds and cash might not be a bad idea. After all, correlations are strongest when everything is crashing.

If you're not into hoarding cash and you're all about being in the game, dive into our Hedge Funds Tracker. See what the world's top investors are up to, so you can snooze like a pro, knowing you're in sync with the Gurus...

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