EPISODE 213: Benjamin Bowler, Md & Global Head of Equity Derivatives Research at BofA Merrill Lynch

In this episode of The Alpha Exchange, Dean Curnutt interviews Ben Bowler, Global Head of Equity Derivatives Research at Bank of America Merrill Lynch, about the recent market volatility. They discuss the market chaos of the last 60 days, including the VIX reaching levels not seen since the COVID crash and the GFC. Bowler highlights the historic nature of April, comparing it to major crises and pointing out the increasing loss of confidence in the U.S. from outside investors due to a joint drawdown in stock, bond, and dollar markets. They delve into the reasons behind the risk-off sentiment, the role of policy puts, and the impact of cross-asset correlations. Bowler also explains the Global Financial Stress Indicator and the critical stress signal, noting its contrarian nature since 2013. The conversation further explores market fragility, the concentration of realized vol in single stocks, and the influence of technical factors like volatility control and passive investing. Finally, they discuss the challenges of volatility markets seeing the full picture, the potential for an AI bubble, and strategies for expressing views on the long-term exceptionalism of the U.S. market.