Correlation to Return Into Month-End: 3-Minutes MLIV
Speakers
Mark Cudmore
— Executive Editor, Bloomberg Live / Macro Strategist
Summary
Mark Cudmore analyzes extreme volatility in South Korean equities, noting a $1.7 trillion wipeout and bubble-like behavior, while highlighting resilience in global markets, especially the S&P 500 near record highs. He forecasts a surge in cross-market correlation into month-end driven by the Fed and US-Iran tensions, making relative-value trades hazardous.
- South Korean equities experiencing extreme volatility, likened to 1990s Asian crisis, with $1.7 trillion lost in five weeks.
- Korea close below 200-day moving average, deleveraging pressures expected into month-end.
- Global stocks outside Korea show impressive resilience; S&P 500 less than 2.5% from record highs.
- Chip stock weakness noted but not derailing the broader equity uptrend.
- Historically low cross-market correlation forecast to spike in final days of the month.
- Fed decision and US-Iran geopolitical risk are key binary catalysts that could move all markets together.
- Relative-value trades have recently blown up, reinforcing the case for higher correlation.
Ideas
Korean equities bubble popping, extreme volatility
South Korean equities are experiencing a severe bubble pop with insane volatility, $1.7 trillion wiped out in five weeks, closing below the 200-day moving average, and likely continued deleveraging pressures into month-end. The market is fragile and risky.
S&P 500 resilient, near record highs
Global equities outside Korea are incredibly resilient and strong. The S&P 500 is less than 2.5% off record highs, and stock markets overall are performing very well despite recent chip weakness. This resilience is impressive and supports a bullish outlook for the S&P 500.
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This Bloomberg Markets video, published July 29, 2026, features Mark Cudmore discussing EWY, SPY. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Mark Cudmore · Tickers: EWY, SPY