Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Could a credit event derail the equity bull? By: Humble Student of the Markets July 29, 2023 at 13:30 PM EDT Is the soft landing here? Wall Street strategists have been racing to reduce their recession odds in the last week. More importantly, Fed Chair Powell revealed during the post-FOMC meeting press conference that Fed staff had upgraded its forecast from a mild recession in H2 2023 to no recession. In the past few weeks, the stock market has become increasingly exuberant, but the bond market remains nervous. The VIX Index, which is the option implied volatility of stocks, has been steadily falling, indicating the expectation of lower risk. On the other hand, the MOVE Index, which is the bond market’s equivalent of VIX, is still elevated. I interpret these readings as the stock market is discounting a soft landing, while the bond market is still concerned about a recession. In addition, the Bank of Japan’s decision to ease its yield curve control program has rattled the bond market. Equity bulls run the risk of a credit event which could spark a bear market. Here is my assessment of that risk. The full post can be found here. Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Could a credit event derail the equity bull? By: Humble Student of the Markets July 29, 2023 at 13:30 PM EDT Is the soft landing here? Wall Street strategists have been racing to reduce their recession odds in the last week. More importantly, Fed Chair Powell revealed during the post-FOMC meeting press conference that Fed staff had upgraded its forecast from a mild recession in H2 2023 to no recession. In the past few weeks, the stock market has become increasingly exuberant, but the bond market remains nervous. The VIX Index, which is the option implied volatility of stocks, has been steadily falling, indicating the expectation of lower risk. On the other hand, the MOVE Index, which is the bond market’s equivalent of VIX, is still elevated. I interpret these readings as the stock market is discounting a soft landing, while the bond market is still concerned about a recession. In addition, the Bank of Japan’s decision to ease its yield curve control program has rattled the bond market. Equity bulls run the risk of a credit event which could spark a bear market. Here is my assessment of that risk. The full post can be found here.