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RiskReversal Recap: May 14, 2025
RiskReversal Media & RiskReversal Media
May 14, 2025
MARKET WRAP
An extremely quiet day for the market with the SPX continuing to trade in a tight range since mid-day yesterday. The SPX is up nearly +4% on the week but still has a couple of economic data points tomorrow morning coming in the form of Retail Sales and PPI (and a speech by Fed Chair Powell). Of note, the 10Y yield was higher once again, now 4.54%. That’s above the tariff/bond market scare from early April, but the recent move is for much different reasons. For today: SPX +0.1%, QQQ +0.3% and IWM -0.7%
Gold was lower again and is now down about -7% in the past week and a half. Oil was lower on the and remains volatile day to day.
After hours: CoreWeave (CRWV) is higher by about +11% on a beat, Cisco CSCO is up about +4%. Both moves are slightly inside what options were pricing.
MRKT MATRIX: TODAY’S TOP STORIES
S&P 500 is little changed as traders try to build on strong rebound from April low (CNBC)
US Announces More Than $243 Billion in Deals With Qatar
Trump’s Mideast Visit Opens Floodgate of AI Deals Led by Nvidia (Bloomberg)
Bank of America raises price targets on Nvidia, AMD after the pair land Saudi deals during Trump visit (CNBC)
Mortgage demand from homebuyers continues to recover, even with higher interest rates (CNBC)
Chinese e-commerce sites offer discounts of up to $351 on Apple’s latest iPhones (Reuters)
Foxconn Posts Strong Profit But Lowers Guidance Amid Tariff Risks (WSJ)
US warns against using Huawei chips ‘anywhere in the world’ (Financial Times)
HBO Max is coming back — Warner Bros. Discovery is renaming its streaming service, again (CNBC)
WHAT’S NEXT?
To illustrate the dramatic collapse in implied volatility over the past two weeks, it's helpful to examine how the options market is now pricing potential moves in the S&P 500. On the upside, a return to all-time highs—roughly 4.5% above current levels—isn't being priced in until the first week of July. Just weeks ago, that kind of move was expected within 4–5 trading days.
The shift is even more notable on the downside: the year-end implied move (Dec 31) only takes the SPX down to around 5,200—about 11% lower, but still 7% above the intraday lows from five weeks ago. In short, the options market now seems confident that the most volatile period is behind us, suggesting any move higher will likely be gradual, and any move lower will take time to unfold before any sudden acceleration. Whether that’s true, we’ll see. But for now, the fear is gone.
Tomorrow is pretty jammed packed in the morning with economic data points, a speech at a DC conference by Fed Chair Powell, and some interesting earnings:
Thursday, May 15
8:30am - Initial Jobless Claims
8:30am - PPI
8:30am - Retail Sales
8:30am - NY / Philly Manufacturing
8:40am - Fed Chair Powell Speech
Earnings Pre-Market: BABA 5.5%, WMT 4.5%, DE 5%
Earnings After Hours: AMAT 5%, TTWO 5.5%
