May 23, 2024 Trending New York News

What is Vix, the index of fear that has returned to the markets

It is a sort of barometer on the volatility and nervousness of the financial markets, which had been put on mothballs after the 2008 crisis. It is now at 53, in normal times it travels below 20 points.

It is a sort of barometer on the volatility and nervousness of the financial markets, which had been put on mothballs after the 2008 crisis. It is now at 53, in normal times it travels below 20 points.

The sharp drop in oil prices and the spread of coronavirus have “awakened” the Vix index, the one that collects the state of nervousness and volatility of the markets in a single issue, and which today travels above 53 points.

A sort of ‘thermometer’, a sign of the suffering of the price lists and the pessimism of the investors, which had remained ‘under control’ since 2008, the year of the Lehman Brothers crack when it broke through 60 points. The Chicago Board Options Exchange Volatility Index, to reveal the dynamics that are moving on the markets, is based on the performance of the options on the S&P 500 index listed on the Chicago market (Cboe) but is kept an eye on traders all over the world. world. In ‘normal’ times the Vix travels under 20 points.

At the start of the week, the “fear index” instead increased by 23% to close with a surge to 54.46 (after hitting 62 intraday), on the day Wall Street suspended trading for 15 minutes with the drop in the S&P 500 was almost 8% and the massive inflows of US Treasury bonds pushed the entire yield curve below 1% for the first time. And with gold, a good refuge par excellence, which has touched the highest levels for seven years. The thrust has also infected the European and Asian stock exchanges, not even sparing the squares of cryptocurrencies.

Markets now expect further monetary easing to support the economy and that the Federal Reserve will cut interest rates for the second time this month as governments prepare to launch aid and support packages to the economy from the United States. to Japan via Italy and Europe. “Investors are looking for signs that there is light at the end of the tunnel,” said Adam Sarhan, chief executive officer of 50 Park Investments, in New York. But it is not optimism that seems to prevail.

Wall Street attempted and rebounded yesterday, with the Dow Jones gaining 4.9%, the S&P 500 4.94% and the Nasdaq 4.95%. But volatility is just around the corner and the news that arrives on the health front, with over 118,000 cases and at least 4,290 deaths, does not bode well.

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