Traders work on the floor of the New York Stock Exchange during morning trading on January 11, 2024.
Angela Weiss | Afp | Getty Images
Wall Street’s rise to record highs has been marked by remarkably low volatility.
The S&P 500 has gone 377 days without a 2.05% selloff. This is the longest stretch for the benchmark since the Great Financial Crisis, according to FactSet data compiled by CNBC. The index also did not record an increase of at least 2.15% during this time.
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The S&P 500 has gone 377 days without a selloff of 2.05% or more, marking the longest stretch since the Great Financial Crisis.
CNBC
This market lull comes as investors pile into mega-cap tech stocks like Nvidia, betting that artificial intelligence will boost profits. The S&P 500 has risen more than 14% since the beginning of the year. Expectations of interest rate cuts from the Federal Reserve have also boosted the broad market index in 2024, as new data shows inflation moving closer to the central bank’s 2% target.
“At high levels, the clouds of macroeconomic uncertainty have dissipated over the past 12 months as declining inflation provided much-needed clarity on the future path of monetary policy,” said Adam Turnquist, chief technical strategist at LPL Financial. “The changing narrative from rate hikes to rate cuts to recessions to economic resilience helped drive the VIX down to multi-year lows and ultimately shift the backdrop for equities from a high-volatility regime to a low-volatility regime.”
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The S&P 500 has gone the longest time since the Great Financial Crisis without a gain of 2.15% or more.
CNBC
Many investors are thinking about this CBOE Volatility Index (VIX) the de facto fear meter on the street. Last month it hit its lowest level since November 2020. On Friday it was trading at around 13, close to historic lows.
“[T]“The low VIX reflects complacency in the options market as the VIX is at a three-year low,” said Joseph Cusick, senior vice president and portfolio specialist at Calamos Investments. “This makes sense because institutions have been actively hedging; There is no urgency to sell underlying assets when these insurance products are in place.”
It is unclear how long this period of low volatility will last.
In 2017, the S&P 500 recorded only eight daily moves of more than 1%, while the VIX fell to historic lows below 9. However, the following year, volatility returned to the market and the VIX rose above 50 before declining.
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2024-06-21 17:59:09
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