FAST FIVE: Morgan Stanley: Central Banks Are Injecting $100 Billion Per Month To Crush Vol And Spike Markets

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The answer was clear enough: just like during the POMO days of QE1, QE2, Operation Twist, and QE3, stocks have risen in every single week when the Fed's balance sheet increased, following the three weeks of declines that led to the October 11 announcement.

With both of those concerns fading recently along with central bank balance sheet expansion those outflows have reversed sharply to inflows.

There was also a large gap in early 2018 when we experienced a sharp spike in realized vol but the ERP remained quite low.

Of course, all of the above was written by a Michael Wilson who is merely covering his (bearish) ass in case the S&P does hit 3,400 which as emerged earlier today, is JPMorgan's as well as Goldman's 2020 target.

This makes sense and in in fact confirms Wilson's view that “downside risks to growth remain higher than upside risks”, especially since the S&P 500 is a very defensive equity market and could be viewed as its own asset class that received a unique allocation in passive portfolios.

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