Correlation to Return Into Month-End: 3-Minutes MLIV

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.