Volatility Pulse - Chips ahoy
Good timing on SMH puts
SMH total put open interest hit nearly 2 million contracts, 3x call open interest. Put OI tripled in 6 months while call OI barely moved.
Source: Bloomberg
Semis Vol Is Double Nasdaq Vol
The ratio of QQQ vol to SMH vol hit an all-time low of 0.5357. Semis implied volatility is almost double the Nasdaq. All the fear in the AI trade is concentrated in one sector while the index looks calm.
Source: Bloomberg
Retail Bought the Dip. Again.
Tech ETF weekly inflows the week of June 3 reached near Liberation Day highs, the same week the Nasdaq had its worst session since April 2025. Retail investors bought every AI dip in 2025 and 2026. They bought this one too.
Source: JPMorgan
Good News Is Bad News
Fed Just Flipped to Hikes
Market-implied Fed moves through December 2026 crossed above zero for the first time this cycle, now pricing 1.01 net hikes, not cuts. Four months ago the market was pricing 2.5 cuts. Strong payrolls and CPI at 3.8% are why.
Source: Bloomberg
Pick your expensive metric
On 17 of 20 valuation metrics tracked, the S&P 500 is above its historical average. Market Cap to GDP is 191% above its average with a Z-score of 3.5. Shiller PE of 39.2 is 123% above its historical norm.
Source: BofA
AI Capex in historical terms
On an annual GDP basis, the AI hyperscaler capex boom of 2023-27 is comparable to the 1850s railroad buildout, the largest infrastructure cycle in US history. The only prior era bigger on a cumulative basis was the railroads at the peak of American expansion.
Source: TS Lombard
Only 2000 Was Hotter
AI Is Cutting Jobs Faster Than Ever
87,714 job cuts attributed to AI in the first five months of 2026, nearly double the full-year 2025 total of 54,836. The technology built to create efficiency is, in 2026, cutting jobs at the fastest pace on record.
Source: Challenger
CAPE Near 2000 - does it matter anymore?
CAPE is approaching 2000 tech bubble levels. But the relationship between CAPE and forward returns completely reversed since 2010. High CAPE no longer predicts low returns. The index composition changed: 70% growth sectors vs 30% cyclicals.
Source: Bloomberg
The IPO Year
SpaceX IPO Makes This Chart Obsolete
Deutsche Bank published this chart showing a $60B OpenAI IPO would double Saudi Aramco record. Days later SpaceX priced at $74.4B, making even that projection obsolete.
Source: Deutsche Bank
Passive Just Beat Active for the First Time
For the first time in history, passive funds hold more money than active funds in US equities: 53% vs 47% as of year-end 2024. It took 30 years. Nearly every dollar flowing into markets now goes in without anyone asking the price.
Source: Research Affiliates
Japan Buyback Boom Hits a Record
Japanese corporations completed 18 trillion yen in buybacks in 2025, the most in history, up from near zero a decade ago. Corporate governance reform is creating a structural shift in Japanese equities even as bond yields hit all-time highs.
Source: JPMorgan
Just Because...
No Left or Right in This Language
The Guugu Ymithirr people of Australia have no words for left or right and navigate exclusively by cardinal directions at all times even indoors. To pass the salt: move it slightly northwest. Studies show this makes them dramatically better navigators.
