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Business Standard
21-07-2025
- Business
- Business Standard
India VIX at 15-month low as market stays calm; muted volatility to persist
India's market volatility index has slipped to a 15-month low, with analysts attributing the decline to the absence of major geopolitical triggers and expecting the subdued volatility to persist in the near term. India VIX, the measure of market volatility in the domestic market, is currently trading at 11.4, the lowest closing since April 29, 2024. The gauge has fallen for the third straight month and is down 37 per cent so far since May. The volatility gauge measures the market's expectation of future volatility based on Nifty50 index options contracts. It typically rises when market volatility is expected to increase, indicating higher uncertainty or risk in the near future. Currently, there are no major immediate events expected, which is why the VIX is at its lowest level in about 15 months, according to Nilesh Shah, head of derivatives and technical research at Centrum Broking. "We've also seen a steady decline in implied volatility (IV), which is actually supportive for the market," he said. Earlier concerns, such as geopolitical tensions, particularly around US President Trump's tariffs, have also eased, said Chandan Taparia, head of technical and derivatives research at Motilal Oswal Wealth Management. "There's stability in crude oil prices and no immediate concerns around central banks like the Federal Reserve (FOMC) or the Reserve Bank of India (RBI). With most major events behind us, the focus has shifted to quarterly earnings." Global stability across equity markets, including in indices like the Dow Jones, is another reason why India's volatility remains subdued, Taparia noted. The CBOE VIX, America's volatility index, has dropped over the past four months, he added. No Jane Street Impact There is no connection between the decline in India VIX and the Jane Street ban, analysts clarified. The curb on trading by Jane Street has already played out, Shah said. 'Since this is based on the Nifty Index options contracts, some might think there's a connection. But India VIX reflects overall market sentiment, not direct movements in the options market,' he explained. Investors need to assess implied volatility to understand activity in the options market more precisely. Taparia also emphasised that the current low VIX levels are not related to the ban on Jane Street.
Irish Examiner
11-07-2025
- Business
- Irish Examiner
Trump's turbulent tariff policy sees markets edge lower
US president Donald Trump threatened to double the baseline universal tariff to 20%, citing record stock gains to dispel fears that such a move would hammer the global economy. Financial markets edged lower but the relatively subdued reaction showed the extent to which traders have become desensitized to the economic dangers - something that could lead to a reckoning in markets further down the line. Trump told NBC News Thursday he's considering a flat tariff of 15-to-20% on all trading partners, higher than the current 10% rate and analyst expectations. That was on top of new levies on Canada and followed steep rates on Brazil earlier in the week. 'I think the tariffs have been very well-received,' NBC quoted Trump as saying. 'The stock market hit a new high today.' Contracts for the S&P 500 and European stocks both fell on Friday, while the dollar strengthened against most major peers and the yen fell. The US stock market's rise to a record high hasn't been smooth. The S&P 500 nearly plunged into a bear market in April while the Nasdaq 100 did hit that level following Trump's 'Liberation Day.' Despite the recovery, US benchmarks are trailing global equities this year as trade uncertainty and the impact of tax cuts on the country's deficit stoked doubts about its exceptionalism in global markets. But in a sign traders have become less sensitive to tariff developments recently, the CBOE VIX index of US equity volatility this week dropped to the lowest since February, while an equivalent measure of fluctuations in the US treasury market fell to the lowest since 2022. The S&P 500 Index set another record high, as did Bitcoin, seen as a gauge of risk sentiment. 'Record highs and a low VIX signals markets have already priced in perfection — a soft landing and a clean unwind of tariff risks — which feels wildly out of sync with the real-world picture,' said Hebe Chen, an analyst at Vantage Markets in Sydney. 'A pullback is very much on the table, with the S&P 500 glued to overbought territory,' she said. JPMorgan Chasechief executive officer Jamie Dimon is among those voicing concerns. Markets are too complacent about the threats caused by rising trade frictions, he said in Dublin on Thursday. Trump's latest comments cap a week of tariff announcements ranging from an unexpected 50% on Brazil — a country that received the benchmark 10% rate on April 2 'Liberation Day' and runs a trade deficit with the US — to 35% on some Canadian goods. 'We should anticipate larger tariff threats against other countries in the coming weeks,' said Michael Pearce, lead US economist for Oxford Economics. 'The key question is the degree to which the administration follows through on the threats. Either way, financial markets appear too sanguine in my view on the downside risks from escalating tariffs.' Trump posted this week about the record highs in US equities. 'Tech Stocks, Industrial Stocks, & NASDAQ, HIT ALL-TIME, RECORD HIGHS!' he wrote. 'USA is taking in Hundreds of Billions of Dollars in Tariffs. COUNTRY IS NOW 'BACK.' A GREAT CREDIT!' Markets may be getting 'tariff fatigue' and opting to stay out of major trades until some final news on tariffs, according to David Chao, a global market strategist at Invesco Asset Management. 'There's just been so much policy overload, with constant updates, delays and new announcements that is creating a confusing environment.' Continued market gains may inadvertently greenlight harsher US tariffs as Trump has historically looked to financial barometers as a measure of policy success. By contrast, declines could force the administration to pull back, as Trump did after his April 2 levies spurred the rare combination of a weakening US dollar, a selloff in Treasuries and a stock market slide. At a conference in Idaho on Wednesday dubbed 'the summer camp for billionaires,' US treasury secretary Scott Bessent objected to the notion of a so-called TACO trade, an acronym coined by a Financial Times columnist that stands for 'Trump Always Chickens Out' in the face of market losses, according to one person in the room. Instead, he said Trump's strategy is more akin to FAFO, an acronym popular on social media that stands for 'F—- Around and Find Out,' the person said. 'With US equities at record highs, the Trump administration has been emboldened to re-intensify tariff threats,' said Eugenia Victorino, head of Asia strategy at Skandinaviska Enskilda Banken. 'Higher tariffs may trigger a fresh round of US equity declines, which may prompt Trump to pull back yet again.' For now, the economic blow some feared at the start of the year has yet to materialize. Inflation in the US remains contained, and export figures from Asia have been propped up by a rush of shipments to beat the looming tariffs. A surge in Southeast Asia's exports amid frontloading is due for payback, threatening a hit to gross domestic product growth rates in the second half of the year. Meanwhile, the weaker demand and higher cost of imported goods into the US have compelled companies abroad to cut costs, risking investment and future hiring. Despite Trump's latest tariff salvos, there's still a question over whether they'll be implemented or are just another threat to squeeze concessions from countries. 'The back and forth with tariffs is designed to accelerate the deals and ensure that Trump can claim victories along the way,' said Marko Papic, chief strategist of GeoMacro at BCA Research. 'As such, investors should not try to trade every single tweet or decision.' Bloomberg
Qatar Tribune
29-06-2025
- Business
- Qatar Tribune
Markets rally, Trump's policymaking stirs concerns
Agencies As Wall Street slowly puts April's tariff shakeout behind and indexes set record highs, investors remain on edge and wary of U.S. President Donald Trump's rapid-fire, sometimes chaotic policymaking process and see the rally as fragile. The S&P 500 and Nasdaq composite index advanced past their previous highs into uncharted territory on Friday. Yet traders and investors remain wary of what may lie ahead. Trump's April 2 reciprocal tariffs on major trading partners roiled global financial markets and put the S&P 500 on the threshold of a bear market designation when it ended down 19% from its Feb. 19 record-high close. This week's leg up came after a U.S.-brokered cease-fire between Israel and Iran brought an end to a 12-day air battle that had sparked a jump in crude prices and raised worries of higher inflation. But a relief rally started after Trump responded to the initial tariff panic that gripped financial markets by backing away from his most draconian plans. JPMorgan Chase, in the midyear outlook published on Wednesday by its global research team, said the environment was characterized by 'extreme policy uncertainty.' 'Nobody wants to end a week with a risk-on tilt to their portfolios,' said Art Hogan, market strategist at B. Riley Wealth. 'Everyone is aware that just as the market feels more certain and confident, a single wildcard policy announcement could change everything,' even if it does not ignite a firestorm of the kind seen in April. Part of this wariness from institutional investors may be due to the magnitude of the 6% S&P 500 rally that followed Trump's re-election last November and culminated in the last new high posted by the index in February, said Joseph Quinlan, market strategist at Bank of America. 'We were out ahead of our skis,' Quinlan said. A focus on deregulation, tax cuts and corporate deals brought out the 'animal spirits,' he said. Then came the tariff battles. Quinlan remains upbeat on the outlook for U.S. stocks and optimistic that a new global trade system could lead to U.S. companies opening new markets and posting higher revenues and he said he is still cautious. 'There will still be spikes of volatility around policy unknowns.' Overall, measures of market volatility are now well below where they stood at the height of the tariff turmoil in April, with the CBOE VIX index now at 16.3, down from a 52.3 peak on April 8. 'Our clients seem to have become somewhat desensitized to the headlines, but it's still an unhealthy market, with everyone aware that trading could happen based on the whims behind a bunch of' social media posts, said Jeff O'Connor, head of market structure, Americas, at Liquidnet, an institutional trading platform. Trading in the options market shows little sign of the kind of euphoria that characterized stock market rallies of the recent past.'On the institutional front, we do see a lot of hesitation in chasing the market rally,' Stefano Pascale, head of U.S. equity derivatives research at Barclays, said. Unlike past episodes of sharp market selloffs, institutional investors have largely stayed away from employing bullish call options to chase the market higher, Pascale said, referring to plain options that confer the right to buy at a specified future price and date. Bid/ask spreads on many stocks are well above levels O'Connor witnessed in late 2024, while market depth, a measure of the size and number of potential orders, remains at the lowest levels he can recall in the last 20 years. 'The best way to describe the markets in the last couple of months, even as they have recovered, is to say they are unstable,' said Liz Ann Sonders, market strategist at Charles Schwab. She said she is concerned that the market may be reaching 'another point of complacency' akin to that seen in March. 'There's a possibility that we'll be primed for another downside move,' Sonders added. Mark Spindel, chief investment officer at Potomac River Capital in Washington, said he came up with the term 'Snapchat presidency' to describe the whiplash effect on markets of the president's constantly changing policies on markets. 'He feels more like a day trader than a long-term institutional investor,' Spindel said, alluding to Trump's policy flip-flops. 'One minute he's not going to negotiate, and the next he negotiates.' To be sure, traders seem to view those rapid shifts in course as a positive in the current rally, signaling Trump's willingness to heed market signals. 'For now, at least, stocks are willing to overlook the risks that go along with this style and lack of consistent policies, and give the administration a break as being 'market friendly,'' said Steve Sosnick, market strategist at Interactive Brokers.
Time of India
29-06-2025
- Business
- Time of India
US Stock Market outlook: S&P 500, Dow Jones, Nasdaq to fall or continue to rise on Monday?
US stock market indexes -- S&P 500, Dow Jones , and Nasdaq -- will look to continue the positive momentum on Monday. Recent history has shown July has been a strong month for stocks, with the S&P 500 increasing 2.9 per cent in July on average over the past 15 years, Wedbush analysts noted in a report this week. Overall, measures of market volatility are now well below where they stood at the height of the tariff turmoil in April, with the CBOE VIX index now at 16.3, down from a 52.3 peak on April 8. The stock market has powered through all of that in the past few months to set a new record on Friday and reward investors who stayed their ground through a volatile stretch. The S&P 500 closed at an all-time high of 6,173. For now, at least, stocks are willing to overlook the risks that go along with this style and lack of consistent policies, and give the administration a break as being market friendly, said Steve Sosnick, market strategist at Interactive Brokers. Also Read - Gold price prediction by experts for 2025: Will gold rate fall or rise? by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Join new Free to Play WWII MMO War Thunder War Thunder Play Now Undo Relief for Wall Street Investors? While Wall Street can take a bow — and breath a sigh of relief — there's no let-up ahead. The pause President Donald Trump put in effect for many tariffs expires in early July. Second-quarter profit reports and upcoming economic indicators could reveal more about the impact of the tariffs that did go into effect. The Fed could face a tricky decision on interest rates. Live Events Trump wants the Fed to lower interest rates. The Fed says it needs to see the impact of Trump's tariffs before it can act. The president has taken to regularly bashing Jerome Powell, whose term as Fed chair expires next year. According to the Wall Street Journal, Trump could name his nominee to replace Powell unusually early, in an attempt to undermine him. The drama could influence trading in the bond and foreign exchange markets, and by extension on Wall Street. Strong profit reports for the first quarter helped offset the pressure from tariffs. Soon, companies will report results for the quarter ending June 30. While Wall Street analysts have lowered their expectations for earnings growth for the companies in the S&P 500, they still forecast solid growth of 5 per cent, according to FactSet. The average quarterly profit growth over the past five years is 12.7 per cent. Some companies withdrew profit forecasts amid the uncertainty created by tariffs, making forecasting even trickier. FAQs Q1. What are key indexes in US Stock Market? A1. US stock market indexes are S&P 500, Dow Jones, and Nasdaq. Q2. What is current volatile index in US Stock Market? A2. Overall, measures of market volatility are now well below where they stood at the height of the tariff turmoil in April, with the CBOE VIX index now at 16.3, down from a 52.3 peak on April 8.
New Straits Times
29-06-2025
- Business
- New Straits Times
Even as markets rally, Trump's policymaking causes market angst
NEW YORK: As Wall Street puts April's tariff shakeout in the rear-view mirror and indexes set record highs, investors remain wary of US President Donald Trump's rapid-fire, sometimes chaotic policymaking process and see the rally as fragile. The S&P 500 and Nasdaq Composite Index advanced past their previous highs into uncharted territory on Friday. Yet traders and investors remain wary of what may lie ahead. Trump's April 2 reciprocal tariffs on major trading partners roiled global financial markets and put the S&P 500 on the threshold of a bear market designation when it ended down 19 per cent from its Feb 19 record-high close. This week's leg up came after a US-brokered ceasefire between Israel and Iran brought an end to a 12-day air battle that had sparked a jump in crude prices and raised worries of higher inflation. But a relief rally started after Trump responded to the initial tariff panic that gripped financial markets by backing away from his most draconian plans. JP Morgan Chase, in the midyear outlook published on Wednesday by its global research team, said the environment was characterised by "extreme policy uncertainty." "Nobody wants to end a week with a risk-on tilt to their portfolios," said Art Hogan, market strategist at B. Riley Wealth. Everyone is aware that just as the market feels more certain and confident, a single wildcard policy announcement could change everything," even if it does not ignite a firestorm of the kind seen in April. Part of this wariness from institutional investors may be due to the magnitude of the six per cent S&P 500 rally that followed Trump's re-election last November and culminated in the last new high posted by the index in February, said Joseph Quinlan, market strategist at Bank of America. "We were out ahead of our skis," Quinlan said. A focus on deregulation, tax cuts and corporate deals brought out the "animal spirits," he said. Then came the tariff battles. Quinlan remains upbeat on the outlook for US stocks and optimistic that a new global trade system could lead to US companies opening new markets and posting higher revenues and profits. But he said he is still cautious. "There will still be spikes of volatility around policy unknowns." Overall, measures of market volatility are now well below where they stood at the height of the tariff turmoil in April, with the CBOE VIX index now at 16.30, down from a 52.30 peak on Apr 8. UNSTABLE MARKETS "Our clients seem to have become somewhat desensitised to the headlines, but it's still an unhealthy market, with everyone aware that trading could happen based on the whims behind a bunch of" social media posts, said Jeff O'Connor, head of market structure, Americas, at Liquidnet, an institutional trading platform. Trading in the options market shows little sign of the kind of euphoria that characterised stock market rallies of the recent past. "On the institutional front, we do see a lot of hesitation in chasing the market rally," Stefano Pascale, head of US equity derivatives research at Barclays, said. Unlike past episodes of sharp market selloffs, institutional investors have largely stayed away from employing bullish call options to chase the market higher, Pascale said, referring to plain options that confer the right to buy at a specified future price and date. Bid/ask spreads on many stocks are well above levels O'Connor witnessed in late 2024, while market depth – a measure of the size and number of potential orders – remains at the lowest levels he can recall in the last 20 years. "The best way to describe the markets in the last couple of months, even as they have recovered, is to say they are unstable," said Liz Ann Sonders, market strategist at Charles Schwab. She said she is concerned that the market may be reaching "another point of complacency" akin to that seen in March. "There's a possibility that we'll be primed for another downside move," Sonders added. Mark Spindel, chief investment officer at Potomac River Capital in Washington, said he came up with the term "Snapchat presidency" to describe the whiplash effect on markets of the president's constantly changing policies on markets. "He feels more like a day trader than a long-term institutional investor," Spindel said, alluding to Trump's policy flip-flops. "One minute he's not going to negotiate, and the next he negotiates." To be sure, traders seem to view those rapid shifts in course as a positive in the current rally, signalling Trump's willingness to heed market signals. "For now, at least, stocks are willing to overlook the risks that go along with this style and lack of consistent policies, and give the administration a break as being 'market friendly'," said Steve Sosnick, market strategist at Interactive Brokers.
