Axonic on CNBC: Current Market Conditions

Jul 25, 2023 | In the News

Peter Cecchini, Director of Research at Axonic Capital, recently appeared on CNBC’s The Closing Bell to discuss the current market conditions. During the segment, Cecchini noted the market’s unbelievable resilience despite dislocated equity and credit volatility, with credit spreads remaining wide. He also highlighted the higher-than-expected high-yield CDX compared to equity volatility and the emergence of middle-market default. He explained that the low VIX is influenced by the dominance of large tech companies, which prevents the necessary dispersion for realized volatility.

Cecchini explained how Axonic is betting on higher equity volatility as the earnings season progresses. He expressed concerns about the risk of a tech bubble pop due to the narrow breadth of the market, where a few names are propping up the entire market. This situation indicates fragility. Regarding the upcoming Fed meeting, he believes it will likely be a non-event, with a focus on the long-term impacts of previous monetary policies on growth and earnings growth.

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