Wealthion Macro Update 10/6/25

France‘s new Prime Minister Sebastien Lecornu (and his government) resigned on Monday, hours after Lecornu announced his cabinet line-up, in a major deepening of France’s political crisis that drove European stocks and the euro sharply lower.  The swift, unexpected resignation came after allies and foes alike threatened to topple the new government, with Lecornu saying that meant he could not do his job. Opposition parties immediately urged President Emmanuel Macron to resign, or call a snap parliamentary election, saying there was no other way out of the crisis.

Japanese stocks surged more than 5%, the yen fell 2% after fiscal and monetary dove Sanae Takaichi was elected leader of the ruling party putting her on course to become Japan’s first female prime minister. 

In conjunction with the lengthening U.S. government shutdown, investors rushed to alternative assets with gold ($3,949.57) and bitcoin ($125,689) touching all-time highs.

Bullishness in equity options is unprecedented.  In recent weeks the VIX index has been rising on accelerated call buying (as opposed to traditional rises on put buying).  This past Wednesday, calls as a percentage of total option volume hit a record-matching 65%.  And last week, the S&P 500 was green for five days in a row (+1.1%) and at the same time the VIX increased five straight days (+1.36 points), something that has never before occurred since the creation of VIX in 1990.

The Trump administration announced Friday afternoon it is negotiating to take a direct stake in Critical Metals Corp. (CRML) which is developing the largest rare-earths project in Greenland.  CRML shares are trading up a stunning 80% in premarket trading.

Chart of the Week:  Apollo’s Torsten Slok warns of a repeat in 2021 inflation in reporting that over 60% of CPI items are now showing annualized month-over-month price increases of 3% or greater.