This Is The Macro Reset | Nik Bhatia

Nik Bhatia discusses a macro reset prompted by recent volatility from the Iran war, with oil above $100, stocks breaking multi-year trends, elevated VIX and MOVE indexes, and a strengthening dollar. He wipes the slate clean, letting prices dictate over prior biases of strong growth and tame inflation, while noting war's unpredictability as a blind spot compared to last year's more certain tariff episode.

Oil Shock Signals and Market Reactions

Oil at $100+ (both Brent and WTI) pressures stocks by eroding margins and consumer spending but has not broken treasuries, which hold at 4.25% on the 10-year yield after ranging 4-4.25% recently. The dollar's surge hurts risk assets like equities, while volatility (VIX as put option insurance pricing) is lower than during "Liberation Day" tariffs but harder to fade due to geopolitical unknowns. Bhatia tracks these via implied volatility indexes, distinguishing realized (past moves) from implied (future protection costs).