The VIX has recently been recording record lows, and even if it went up to 12.57 on Friday, 10th November 2017, due to jitters caused by the news of a probable delay in a cut in the corporate tax rate, it is still very low historically. The VIX has been taken to indicate the fear of investors regarding trading, and it can also be a measure of complacency.
The CBOE Volatility Index .VIX, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, was down 0.24 points to 9.19, after earlier falling to 9.04, its lowest since December 1993. The VIX has never ended a session under 9 in its history but is on pace to log a close near that level today.
The VIX is derived from the price of S&P 500 Index .SPX options. A low VIX reading typically indicates a bullish outlook for stocks.
The financial markets have become, to use David Stockman`s phrase, one huge gambling casino. The size of the derivative market, which is now an impressive $639 trillion, dwarfs the trivial Forex daily turnover of only $5 trillion. What is disturbing is that volatility has recently hovered at 10 or even below except for a slight blip a few weeks ago.
David Stockman’s prophecy over Wall Street seems to announce an Annus Horribilis : "This is one of the most dangerous market environments we’ve ever been in. It’s the calm before a gigantic, horrendous storm that I don’t think is too far down the road," he recently said on "Futures Now."
House Republicans voted Thursday to deliver on their promise to repeal Dodd-Frank – the massive set of Wall Street regulations President Barack Obama signed into law after the 2008 financial crisis.
House Resolution 10, or the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act of 2017, passed by a vote of 233-186 in the lower chamber; eleven representatives did not vote.
The most widely monitored ‘fear gauge’ on Wall Street has fallen to its lowest level since 1993, helped by one of the strongest corporate earnings seasons in years, geopolitical risks around North Korea cooling off, and Emmanuel Macron’s French presidential victory removing a possible source of upset across Europe.
The CBOE Volatility Index, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, closed at 9.77, its lowest close since December 1993, according to Bloomberg data.
The index is the most widely followed barometer of expected near-term stock market volatility and tends to spike when there are potential sources of shock on the horizon. But analysts said this week that there are no obvious risky events immediately in the pipeline and macro-economic data has been relatively robust too.
Apple is the world’s most valuable publicly traded company, and it just broke its own record. Shares opened at $149.06 a piece on Monday, with 5.2 billion outstanding shares. Following a positive analyst report, Apple’s shares rose over 3% in midday trading to a record high of $153.70. At one point, the company’s market value rose above $800 billion before retreating below that barrier. Apple’s shares closed up 2.7% for the day at $153.01, good for a market value of $797.8 billion.
Stocks have rallied about 15% at Wall Street since the presidential election of the last November. The Standard & Poor’s 500 hit the 2400 mark at the beginning of March, after four month featured by extremely low volatility, as shown by the VIX index (see Figure 1), a popular measure of the implied volatility of S&P 500 index options, published by the Chicago Board Options Exchange. Such measure is colloquially defined as the fear index since, generally, the VIX has an inverse relationship to the stock market. It tends to increase when stocks decline and vice-versa. A rising stock market is considered as less risky and here is why, during these four months of almost unchanged uptrend, the VIX stood at historically low levels. Now, at the end of March, the VIX is testing its 200 days moving average, after a long accumulation on the historical lows and it is trying to get through the 13 points mark that has been intact since January.
