“The risk of a choppier path ahead for the equity bull market is pointing to the outbreak of a more contagious coronavirus (COVID-19) strain and the potential of less supportive U.S. monetary policy,” Bloomberg wrote in an analysis published Wednesday.
Despite this, the article emphasizes the greater likelihood of more equitable improvements underpinned by vigorous immunization campaigns. “That mix would be a departure from the first half, when the Cboe Volatility Index, or VIX, plummeted to pre-pandemic lows as the S&P 500 surged 14% on a wave of liquidity,” Bloomberg reported.
The CBOE Skew Index, which gauges the cost of tail-risk equity protection, is also used in the analysis to hint at market worries as the gauge remains at record highs.
Viktor Shvets, Macquarie Capital’s head of Asian strategy, also backed with the study suggesting an upside grind. According to Bloomberg, Macquarie’s Shvets stated, “Essentially, one should be prepared for increased volatility of results, as churning within and across asset classes and styles intensifies, even if headline indices remain flat.”
Read more about VIX at pre-pandemic levels, midsummer volatility a possibility?/n
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