Barron’s: “Stock Market Volatility Is Quiet, For Now”

Excerpt from Barron’s quoting DataTrek’s Nick Colas:

…. “U.S. stocks were on the brink of a bear market, but that was so last year.

The S&P 500 hurdled its record close on Tuesday, meanwhile, the Cboe Volatility Index, or the VIX, which measures options activity of the S&P 500, is near historic lows again. That kind of calm is apparent across asset classes, but there are exceptions, notes Nicholas Colas, co-founder of DataTrek Research.

The back story. The VIX, or the fear gauge, was at 12 on Tuesday. It would appear to be signaling no fear, especially relative to the Christmas Eve Massacre when the index clocked a spike above 36.

With the S&P 500 on a steady upswing and volatility “barely meriting the name,” Colas wondered if expected price volatility for other asset classes resembled U.S. large-cap stocks. To study this, he dug into options activity for ETFs tracking junk bonds, gold, and stocks outside of the U.S to get VIX-type readings”….

Read the full article here in Barron’s!

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