If there is one characteristic on its surface as counter intuitive of this bull run has been the elevated level of the VIX but one thing we’ve learned is that a big factor is the massive amount of call buying where historically most people are buying index puts as a hedge. Here is an updated chart of US call option contract buying. The visual says it all. The dice is rolling, the wheel is spinning, the slots are ringing, and the cards are being laid out. Also of note, according to BoA and EPFR Global equity fund inflows totaled $58 billion through the week ended February 10th, a record amount.
It’s old news and reflecting the teeth of another round of shutdowns but the UK economy contracted by 7.8% y/o/y in Q4, but a touch better than the estimate of down 8.1%. It actually improved by 1.2% m/o/m in December from November. With the UK having vaccinated more than 10% of its population, well more than the Eurozone, it will be the quickest to recover in the region. The freedom from the bureaucracy of the EU is coming in handy right now.