Market Perspective
Cuts Can Hurt
There has been much handwringing about the U.S. Federal Reserve’s (the Fed) persistent efforts to tame inflation and tighten monetary policy by increasing interest rates. …
Lower, not Low: An Examination of Recent Volatility Trends
Apart from the spike associated with the Silicon Valley Bank led banking crisis in March 2023, volatility, as measured by the Cboe® Volatility Index (the …
Steady Turbulence
Investors are facing many challenges and a new investment landscape. Equity valuations are lower, but not cheap, and volatility levels have shifted higher. On the …
Real Return Conundrum: Between Rocky Volatility & An Inflationary Hard Place
A combination of higher interest rates and signs of slowing growth are putting pressure on valuations. Even with February’s market pullback, the price-to-earnings (P/E) ratio …
Is it 1963 or 2002?
As traders and professional prognosticators hang on every word from Federal Reserve officials, anticipate each data release with tense fingers hovering over keyboards and debate …
Option Writing Premiums Were a Bright Spot in a Dark Year for Investors
The Federal Reserve’s (the Fed) monetary policy transition from accommodative to tightening was sudden – asset purchases to support the economy ended in March 2022, …
Away from Zero1 – The Not So Mysterious Case of Higher Interest Rates
If the story of 2022 stock and bond market returns was written as a whodunit, the crack detective protagonist would have a primary suspect list …
Is the Index Option Market Creating Volatility?
Trading volume in S&P 500® Index option contracts set a record in October 2022. As Figure 1 shows, trading volume in options on the bellwether …
Are Equities On Sale?
Savvy shoppers know a “25% Off” sale is not necessarily a good deal. Is the item discounted from a fair price or did the retailer …
Monetary Policy Outlook Shifts Volatility Expectations Higher
Daily closing values for the Cboe® Volatility Index (the VIX®) have been below its long-term average of 19.61 less than 10% of the time so …