Clicky

  • Login
  • Register
  • Submit Your Content
  • Contact Us
Wednesday, August 21, 2024
World Tribune
No Result
View All Result
  • Home
  • News
  • Business
  • Technology
  • Sports
  • Health
  • Food
Submit
  • Home
  • News
  • Business
  • Technology
  • Sports
  • Health
  • Food
No Result
View All Result
World Tribune
No Result
View All Result

Volatility spike was a ‘huge overreaction,’ but more could be ahead, strategist says

August 21, 2024
in News
Reading Time: 3 mins read
A A
Volatility spike was a ‘huge overreaction,’ but more could be ahead, strategist says
0
SHARES
ShareShareShareShareShare

READ ALSO

Ford delays new EV plant, cancels electric three-row SUV

Michelle Obama: Trump DNC speech

Volatility spike was a ‘huge overreaction,’ but more could be ahead, strategist says

August has been a choppy month for markets, with uncertainty over the health of the global economy sparking a jump in volatility.

At the start of the month, a weaker-than-expected jobs report in the U.S. raised concerns about a potential recession and caused U.S. stocks to slide. Meanwhile, a more hawkish tone from the Bank of Japan led to an unwinding of the yen “carry trade” and saw the Nikkei fall over 12%.  

The VIX, a measure of expected market volatility, topped 65 on August 5, up from around 23 the previous trading day. The index then quickly pulled back, and was last trading around 14.5.

This spike in volatility was a “huge overreaction,” Gerry Fowler, head of European equity strategy and global derivative strategy at UBS, told CNBC’s “Squawk Box Europe” on Tuesday.

UBS had been expecting volatility levels to increase from levels seen earlier in the year, he explained, as historically, the combination of declining nominal GDP, interest rate cuts and uncertainty about the jobs market has boosted volatility.  

Stock Chart IconStock chart icon

Japan trade on deck, Wall Street rally pauses

Vix

“So actually, the last couple of weeks have been just what we thought, except the spike we got was a huge overreaction, and there are consequences for that in the market, but equally the retracement now appears to be a bit of an overreaction,” Fowler said.

“Until we’re sure that this slowdown does not cost jobs in the U.S., we should expect that uncertainty to produce this moderately elevated level of volatility — in contrast to what we’ve seen.”

A key driver of volatility will be whether an economic slowdown in the U.S. leads to further job losses and the U.S. sees “more of a hard landing,” according to Fowler.

Both the next nonfarm payrolls report, which is published monthly, as well as weekly initial jobless claims will be important indicators in the coming weeks, he said.

“All jobs data points will be the key data points for the next few months while we determine whether, what is fairly clearly now a slowdown, is a mid-cycle slowdown that rate cuts will eventually support, or whether the mid-cycle slowdown is actually something a bit worse and cascades with job losses into a deeper slowdown or recession,” he added.

Looking ahead, Fowler said UBS expects markets to “settle at a slightly higher volatility level than we’ve got at the moment.”

He said markets will then likely be trading within a range. “It might be a range that has a slight upward tilt, a slight downward tilt, maybe it’s sideways. But it’s not the strong markets we’ve had,” he added.

Credit: Source link

ShareTweetSendSharePin
Previous Post

The EU wants no corner of the digital sphere left untouched, warning X and AI could be next

Next Post

Yankees’ DJ LeMahieu in another rut as porous season continues

Related Posts

Ford delays new EV plant, cancels electric three-row SUV
News

Ford delays new EV plant, cancels electric three-row SUV

August 21, 2024
Michelle Obama: Trump DNC speech
News

Michelle Obama: Trump DNC speech

August 21, 2024
Ukraine carries out one of largest-ever drone attacks on Moscow
News

Ukraine carries out one of largest-ever drone attacks on Moscow

August 21, 2024
Japan trade on deck, Wall Street rally pauses
News

Japan trade on deck, Wall Street rally pauses

August 21, 2024
GMC targets electric truck leadership against Tesla, Ford, Rivian
News

GMC targets electric truck leadership against Tesla, Ford, Rivian

August 21, 2024
Brits snap up lower mortgages as BOE cut boosts market
News

Brits snap up lower mortgages as BOE cut boosts market

August 20, 2024
Next Post
Yankees’ DJ LeMahieu in another rut as porous season continues

Yankees' DJ LeMahieu in another rut as porous season continues

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

What's New Here!

Daniel Jones readies for return to new-look Giants offense

Daniel Jones readies for return to new-look Giants offense

August 16, 2024
Still the king of business laptops

Still the king of business laptops

August 15, 2024
Global sell-off, FTSE 100, Bank of England rate cut

Global sell-off, FTSE 100, Bank of England rate cut

August 2, 2024
Malaysia’s prime minister lauds country’s burgeoning chip hub status

Malaysia’s prime minister lauds country’s burgeoning chip hub status

August 9, 2024
How much water should you drink a day?

How much water should you drink a day?

July 27, 2024
State of digital health investment, part 5: HTC Vive

State of digital health investment, part 5: HTC Vive

August 20, 2024
‘I will not be silent’

‘I will not be silent’

July 26, 2024

About

World Tribune is an online news portal that shares the latest news on world, business, health, tech, sports, and related topics.

Follow us

Recent Posts

  • Olympian Colleen Quigley goes viral for unusual tongue stretches
  • Forget the 30-year mortgage: The 40-year mortgage needs to become the new American standard, CEO says
  • FDA New Traceability Rule: Ensuring Food Safety With Electronic Data Interchange
  • Amanda Balionis ‘lost a lot of sleep’ over Tiger Woods interview

Newslatter

Loading
  • Submit Your Content
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2024 World Tribune - All Rights Reserved!

No Result
View All Result
  • Home
  • News
  • Business
  • Technology
  • Sports
  • Health
  • Food

© 2024 World Tribune - All Rights Reserved!

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In