Fear Spike! Markets Stir from Complacency
The CBOE Volatility Index, or VIX, is up 10% today like a freak hot sunny day amidst winter. Recently, market volatility had calmed as investors became conditioned to expect bank failures, a Fed printing press, government subsidies, and high unemployment. However, today brought some surprises (and Wall Street hates surprises):
- Republicans smacked the cocky off the face of Democrats with Scott Brown’s Senate victory;
- IBM had weak revenue growth in yesterday’s earnings announcement after the bell;
- The US Dollar caught some buyers; and,
- There are reports that China instructed banks to curb lending.
Just when we thought we had the muddle through economy blazed in our psyche, that pesky thing called “the unknown” happened. If history is any guide, we should expect more surprise developments as earnings season continues and the media begins their 24/7 coverage of the mid-term elections.
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