4 Comments

Nice insights on small caps, thanks!

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My pleasure!

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Could you please elaborate on how the low volatility is "driving" loose financial conditions?

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Thanks for the question!

The metric I’m referring to is the National Financial Conditions Index (NFCI) published by the Fed’s Chicago district. They have a website dedicated to it here:

https://www.chicagofed.org/research/data/nfci/current-data

Their indicator has a financial component to it, including stock market volatility. I believe the VIX is one of the heavier weighted components, which is why I mention low volatility driving loose financial conditions. So that just means credit/money is relatively cheap and available, which should be good for the economy and asset classes like stocks.

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