Eq: Total Market

In an article for Bloomberg, Larry Berman discussed recent improvements in stock market breadth, and what it could mean for volatility. One defining feature of the stock market rally has been the limited participation as the bulk of gains have been driven by the tech sector and a handful of mega cap stocks. 

But, this is now changing as economic data continues to come in better than expected, and more parts of the market are joining the rally. According to Berman, this is an indication that the market rally could be in its early innings which means that recent weakness in volatility is likely to linger. 

Berman labels this as a ‘bullish divergence’. However, he notes that future contracts of volatility are not yet depressed as the front-month contract. This is an indication that the market does expect volatility to pick back up in the second-half of the year which is also consistent with many analysts who see the economy falling into a recession by then. 

He believes that some sort of catalyst is necessary for the bearish scenario to develop which isn’t evident at the moment. This is especially the case as many of the ‘risks’ faced by the market at the start of the year haven’t materialized. 

Finsum: There’s an interesting divergence in the market with front-month volatility depressed, while future contracts remain elevated. However, improving market breadth may signal that future month contracts may also move lower in the coming weeks. 

Nickel and diming it? Not the global ESG Reporting Software Market. Uh uh. The bottom line tells the story: from burgeoning 0.7 billion last year, it’s expected to jump 1.5 billion by 2027, according to a new report by MarketsandMarkets, reported esgnews.com.

Among other factors, a leapfrog in the adoption of cloud-based solutions and services across verticals, as well as a spike in corporate data volume, are the most significant aspects fueling the acceleration of the ESG Reporting Software Market.

Meantime, not quite hitting the mark, you say?

While sorely needed transparency will emerge from a proposed European Union shake up of the ESSG ratings, it will fail to address the standardization indispensable in eliminating the scores causing confusion among investors and companies, according to some in the market, reported reuters.com.

The market for evaluating the ESG performance of companies? Its exploded. That’s because of the money socked into products marketed as sustainable by investors.

"By opting for transparency over standardisation, the EU's proposals are a promising blueprint, but they must go all the way," said Daniel Klier, CEO of data provider ESG Book.


One of the surprising developmentds of 2023 has been the strength in equity markets and subsequent decline in volatility. Currently, the VIX is trading at its lowest levels in the last couple of years despite many headwinds such as a slowing economy and a hawkish Fed.

In Barron’s, Nicholas Jasinski discusses whether the decline in volatility is temporary or will it be sustained for the rest of the year. He notes that many of the market’s worries have eased such as Republicans and Democrats coming together to raise the debt ceiling, the regional banking crisis has seemingly passed, and economic data continues to come in better than expected.

On top of this, investors have been on the sidelines with most inflows into fixed income or defensive strategies, while short interest also remaisn elevated. The net result is that the S&P 500 is up more than 20% from its October lows, and many believe a new bull market has started. 

Whether these gains will sustain and volatility will continue trend lower will depend on factors like inflation, the Fed’s rate path, and credit conditions. However, it’s clear that the market has climbed the bulk of its ‘wall of worry’.

Finsum: Volatility is at its lowest levels since before the bear market began. How it will fare in the coming months will depend on inflation, the Fed, and whether credit conditions continue to tighten.


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