Lockstep Stock Market Is Forcing Everyone to Be a Macro Trader
- Correlation spikes to post-pandemic highs amid Fed uncertainty
- Day traders quit stock picking, hedge funds boost macro bets
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Day-to-day odds-making on whether the Federal Reserve will cause a recession has become the only thing that matters in equities.
One day feast, next day famine -- obsession with a single input, the economy, has driven measures of correlation among individual stocks to the highest since the coronavirus crash. Whacked around by government data and bond yields, the S&P 500 has now posted intraday swings of 1% or more in 31 straight sessions, the second-longest streak in a decade.