Traders work on the floor of the New York Stock Exchange during morning trading on January 11, 2024.
Angela Weiss | afp | fake images
Wall Street's rise to record levels has come with remarkably low volatility.
He S&P 500 It has gone 377 days without a 2.05% settlement. It is the longest stretch for the benchmark since the Great Financial Crisis, according to FactSet data compiled by CNBC. The index has also not seen a gain of at least 2.15% in that time.
The S&P 500 has gone 377 days without a sell-off of 2.05% or more, which is the longest period since the Great Financial Crisis.
CNBC
This market pause comes as investors pile into large-cap tech stocks, such as Nvidia, amid bets that artificial intelligence will boost profits. So far this year, the S&P 500 is up more than 14%. Expectations of Federal Reserve rate cuts have also boosted the broad market index in 2024, as new data shows inflation approaching the central bank's 2% target.
"At a high level, the clouds of macroeconomic uncertainty have lifted over the past 12 months as receding inflation provided much-needed clarity on the future course of monetary policy," said Adam Turnquist, chief technical strategist at LPL Financial. "The shifting narrative from rate hikes to rate cuts and recessions to economic resilience helped drag the VIX to multi-year lows, ultimately changing the backdrop for stocks to low volatility from a high volatility regime.โ
The S&P 500 has recorded its longest stretch without a gain of 2.15% or more since the Great Financial Crisis.
CNBC
Many investors believe that CBOE Volatility Index (VIX) the de facto fear indicator on the street. Last month, it hit its lowest level since November 2020. On Friday, it was trading around 13, near historically low levels.
"[T]The low VIX reflects complacency in the options market, with the VIX at its lowest level in three years," said Joseph Cusick, senior vice president and portfolio specialist at Calamos Investments. "This makes sense as institutions have been actively hedging ; โThere is no urgency to sell the underlying with these insurance products in place.โ
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 record lows below 9. However, the following year, volatility returned to the market and the VIX rose above 50 before decreasing.
