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Stocks are in their longest stretch without a 2% sell-off since the financial crisis
Traders work on the floor of the New York Stock Exchange during morning trading on January 11, 2024.
Angela Weiss | Afp | Getty Images
Wall Street’s rise to all-time highs came with noticeably little volatility.
O S&P 500 went 377 days without a 2.05% selloff. That’s the longest period for the benchmark index since the great financial crisis, according to FactSet data compiled by CNBC. The index also did not have a gain of at least 2.15% during this period.
The S&P 500 has gone 377 days without a selloff of 2.05% or more, the longest period since the Great Financial Crisis.
CNBC
This market lull comes as investors pile into large-cap technology stocks such as Nvidia amid bets that artificial intelligence will boost profits. Year to date, the S&P 500 is up more than 14%. Expectations of rate cuts from the Federal Reserve also boosted the broad market index in 2024 as new data shows inflation moving closer to the central bank’s 2% target.
“At a high level, the clouds of macro uncertainty have lifted over the past 12 months as falling inflation has provided much-needed clarity on the future path of monetary policy,” said Adam Turnquist, chief technical strategist at LPL Financial. “The shift in narrative from rate hikes to rate cuts and from recessions to economic resilience helped drag the VIX to multi-year lows, ultimately shifting the equity landscape to a low-volatility regime from a low-volatility regime. high volatility.”
The S&P 500 achieved the longest period without a gain of 2.15% or more since the Great Financial Crisis.
CNBC
Many investors consider CBOE Volatility Index (VIX) the de facto fear meter on the streets. Last month it hit its lowest level since November 2020. On Friday it traded around 13, close to historically low levels.
“[T]The low VIX reflects complacency in the options market, with the VIX at a three-year low,” said Joseph Cusick, senior vice president and portfolio specialist at Calamos Investments. “This makes sense since institutions have been actively hedging; there is no urgency to sell the underlying with these insurance products in place.”
It is unclear how long this period of low volatility will last.
In 2017, the S&P 500 recorded just eight daily moves greater than 1%, while the VIX fell to historic lows below 9. The following year, however, volatility returned to the market and the VIX rose above 50 before declining.