Shares spread trading markets today have somewhat stabilised against yesterday’s heavy selling, with metals and energies gently inflating against a weakening dollar.
The outlook, however, remains deflationary. Gold, investors’ preferred inflationary hedge, closed in proximity to its 200 day moving average, suggesting a fundamental shift to the metal’s recent popularity beyond normalised volatility.
Risk assets, though, might offer more than the market is currently willing to pay for them.
In times of market stress, risk appetite dwindles and time horizons shorten, potentially undervaluing assets by replacing participants’ diligent valuation with short-term anxiety and margin calls.
This binary pricing mechanism could provide those with longer-dated time horizons an opportunity to earn not only a risk premium but an anxiety premium, too.
Article by Spreadex.
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