Wall Street Is Crowded, Confused, And Caught Offside
Extremes
Beneath the surface, markets are showing some remarkable extremes. Mag 7 volatility looks unusually cheap relative to tech, even as Nasdaq vol remains elevated and hedge fund exposure to the AI giants is near historic highs. Meanwhile, momentum positioning has been crushed, Korean equities are rebounding from extreme valuations and heavy selling, and US housing fundamentals continue to deteriorate. Add Brazil's increasingly uncomfortable fiscal outlook, and the picture is one of extraordinary divergences across assets.