S&P 500 and Combination of Forward PE, VIX, Bullish Sentiment With bullish sentiment among investors in the U.S. stock market nearing an all-time high, we should start to include parachutes for the next monthly reports – just in case! Image: Topdown Charts
VIX – Volatility Indexes The current low volatility environment is likely temporary, presenting an opportunity to capitalize on inexpensive volatility levels to protect equity positions. Image: Bloomberg
VIX – Volatility Index While the current low VIX suggests investors are feeling as calm as a cat in a sunbeam, it also serves as a warning about potential future volatility if market conditions shift unexpectedly. Image: Morgan Stanley Wealth Management
VIX Indexed to Election Day Equity implied volatility typically increases leading up to U.S. presidential elections and decreases afterward, mirroring the market’s reaction to political uncertainty and its resolution. Image: Goldman Sachs Global Investment Research
VIX Seasonality As the 2024 U.S. presidential election approaches, market volatility is expected to remain elevated but should decline after the election results are known. Image: Topdown Charts
VIX Index and S&P 500 Realized Volatility The spread between the VIX and the S&P 10-day realized volatility, when in the 98th percentile, may signal a potential opportunity for U.S. stocks to rally towards the end of the year. Image: BofA Global Research
Yield Curve vs. VIX (Leading Indicator) Should U.S. equity investors anticipate increased volatility ahead, given that the yield curve typically leads the VIX by three years? Image: BofA US Equity & Quant Strategy
Volatility – VIX and U.S. Election The historical trend of the VIX spiking before U.S. elections and then rapidly declining afterward can be attributed to heightened uncertainty and investor fear in the lead-up to the elections. Image: Morgan Stanley Research
S&P 500 and VIX Above 50 When the VIX exceeded 50, the S&P 500 was higher a year later in 91 out of 92 instances since 1990, with an average gain of 33%. Image: Carson Investment Research
S&P 500 Forward 6-Month Performance vs. VIX Level Very high VIX readings may actually precede periods of strong market performance over the subsequent 6 months, as investor sentiment stabilizes and confidence returns. Image: Strategas Research Partners
Fed Funds vs. VIX Taking into account the lag effect of Fed rate hikes on the U.S. economy, should investors expect the VIX to continue being elevated? Image: Deutsche Bank