The Market Brief
Hey team. U.S. futures are cautiously higher during early trading on Wednesday as traders look for any progress on trade deals, with Trump’s 90-day pause on his sharpest tariffs set to expire next week.
Let’s see what’s ahead for the market!
Impact Snapshot
🟥 ADP Payrolls - 8:15am
Macro Viewpoint
US equity futures remained steady as investors brace for Thursday’s June payroll report and keep an eye on the progress of trade negotiations ahead of the July 9 deadline.
After a turbulent April marked by sharp market reactions to trade news, stock indexes are now showing less worry, hovering close to all-time highs.
Recent economic data has reinforced confidence in the US economy’s strength despite the ongoing tariff tensions. The upcoming payrolls report will provide the market with updated clues about the labor market and the likely direction of interest rates.
Wall St. Prime Intel
There’s a mildly positive relationship between realized > implied and SPX forward returns, especially over longer horizons.
This is subtle but meaningful — it tells us something about future asymmetry.
Historically, when the VIX spikes, 12-month forward returns improve, because fear creates dislocations and better entry points. You can see this in the scatterplot below — vol spikes are usually forward bullish, not bearish.
Months before the fact
Volatility compression was one key data point we used for our thesis back in April 14 , when we’d given a bullish bias of where the market was going, after quite literally catching the absolute bottom at 4800.
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