Latest news with #CboeVolatility
Zawya
14-04-2025
- Business
- Zawya
Wall St Week Ahead: Broadening asset volatility intensifies worries for tariff-tossed US stocks
NEW YORK: Wild swings in global markets are poised to keep U.S. stock investors on edge in the coming week, as a weakening dollar and a selloff in Treasuries compound extreme equity volatility that erupted after President Donald Trump launched his sweeping tariffs. The S&P 500 was set for solid gains on the week after Trump pulled back on the heftiest tariffs on many countries, relieving Wall Street's worst-case scenario. Still, the benchmark index still was down about 13% from its February 19 all-time closing high. Concerns about lasting economic damage remained as the U.S. and China ratcheted up their trade battle and questions lingered over levies elsewhere as Trump only paused many of the most severe tariffs. Investors punished U.S. assets in the wake of Trump's tariffs, with the dollar plunging against other major currencies and benchmark U.S. Treasury yields, which move opposite to bond prices, surging. The stock market is "very unsettled" as investors weigh how to price in any economic fallout from the changing tariff backdrop, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. The market is "kind of trapped by the level of uncertainty that lurks out there," Luschini said. "And therefore investors are largely unwilling to make big bets in one direction or another." A volatile week in stocks was highlighted by Wednesday's 9.5% jump for the S&P 500, the index's biggest one-day rise since October 2008 during the heart of the financial crisis. The Cboe Volatility index, an options-based measure of investor anxiety, stood at around 40, more than twice its historic median level. Stock investors were warily watching moves across asset classes, in particular the dollar and Treasuries. An index that measures the dollar against a basket of currencies on Friday fell below 100 for the first time in nearly two years, while the yield on the benchmark 10-year Treasury was on pace for its biggest weekly jump in decades. In many prior risk-off events, the dollar and Treasuries have acted as safe havens, but that has not been the case over the last week as stocks have tumbled, said Walter Todd, chief investment officer at Greenwood Capital in South Carolina. 'We are the reserve currency and the risk free asset of the world, and our markets are not acting as such," Todd said. The yield on the 10-year Treasury on Friday topped 4.5%, which investors have cited as a level that could cause turbulence for stocks. Higher yields translate into higher borrowing costs for consumers and businesses, while potentially making bonds more competitive investments against stocks. "Until Treasuries stabilize and start to behave normally, risk assets will struggle," Barclays analysts said in a note on Friday. Quarterly U.S. corporate results in the coming week provide another test for investors. Goldman Sachs, Johnson & Johnson and Netflix are among the major U.S. companies set to report. Bryant VanCronkhite, senior portfolio manager at Allspring Global Investments, said he would be looking for companies which can show confidence in their businesses despite the shifting tariff landscape. "I'm looking for companies that have the competence and the desire to invest through this cycle," VanCronkhite said. Data on U.S. retail sales for March will shed light on the health of the consumer, but investors may discount the report to some extent because it covers a period before Trump's April 2 tariff announcement. A survey on Friday showed U.S. consumer sentiment fell sharply in April and 12-month inflation expectations surged to the highest level since 1981 amid unease over escalating trade tensions. Markets will remain highly sensitive to developments on the trade front. Investors will hope for evidence of progress between the U.S. and countries for which Trump has paused hefty levies for 90 days. The faceoff between the U.S. and China -- the world's two largest economies -- will also consume attention. Beijing increased its tariffs on U.S. imports to 125% on Friday after Trump's move to hike duties on Chinese goods.
Yahoo
11-04-2025
- Business
- Yahoo
Broadening asset volatility intensifies worries for tariff-tossed US stocks
By Lewis Krauskopf NEW YORK (Reuters) -Wild swings in global markets are poised to keep U.S. stock investors on edge in the coming week, as a weakening dollar and a selloff in Treasuries compound extreme equity volatility that erupted after President Donald Trump launched his sweeping tariffs. The S&P 500 was set for solid gains on the week after Trump pulled back on the heftiest tariffs on many countries, relieving Wall Street's worst-case scenario. Still, the benchmark index still was down about 13% from its February 19 all-time closing high. Concerns about lasting economic damage remained as the U.S. and China ratcheted up their trade battle and questions lingered over levies elsewhere as Trump only paused many of the most severe tariffs. Investors punished U.S. assets in the wake of Trump's tariffs, with the dollar plunging against other major currencies and benchmark U.S. Treasury yields, which move opposite to bond prices, surging. The stock market is "very unsettled" as investors weigh how to price in any economic fallout from the changing tariff backdrop, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. The market is "kind of trapped by the level of uncertainty that lurks out there," Luschini said. "And therefore investors are largely unwilling to make big bets in one direction or another." A volatile week in stocks was highlighted by Wednesday's 9.5% jump for the S&P 500, the index's biggest one-day rise since October 2008 during the heart of the financial crisis. The Cboe Volatility index, an options-based measure of investor anxiety, stood at around 40, more than twice its historic median level. Stock investors were warily watching moves across asset classes, in particular the dollar and Treasuries. An index that measures the dollar against a basket of currencies on Friday fell below 100 for the first time in nearly two years, while the yield on the benchmark 10-year Treasury was on pace for its biggest weekly jump in decades. In many prior risk-off events, the dollar and Treasuries have acted as safe havens, but that has not been the case over the last week as stocks have tumbled, said Walter Todd, chief investment officer at Greenwood Capital in South Carolina. 'We are the reserve currency and the risk free asset of the world, and our markets are not acting as such," Todd said. The yield on the 10-year Treasury on Friday topped 4.5%, which investors have cited as a level that could cause turbulence for stocks. Higher yields translate into higher borrowing costs for consumers and businesses, while potentially making bonds more competitive investments against stocks. "Until Treasuries stabilize and start to behave normally, risk assets will struggle," Barclays analysts said in a note on Friday. Quarterly U.S. corporate results in the coming week provide another test for investors. Goldman Sachs, Johnson & Johnson and Netflix are among the major U.S. companies set to report. Bryant VanCronkhite, senior portfolio manager at Allspring Global Investments, said he would be looking for companies which can show confidence in their businesses despite the shifting tariff landscape. "I'm looking for companies that have the competence and the desire to invest through this cycle," VanCronkhite said. Data on U.S. retail sales for March will shed light on the health of the consumer, but investors may discount the report to some extent because it covers a period before Trump's April 2 tariff announcement. A survey on Friday showed U.S. consumer sentiment fell sharply in April and 12-month inflation expectations surged to the highest level since 1981 amid unease over escalating trade tensions. Markets will remain highly sensitive to developments on the trade front. Investors will hope for evidence of progress between the U.S. and countries for which Trump has paused hefty levies for 90 days. The faceoff between the U.S. and China -- the world's two largest economies -- will also consume attention. Beijing increased its tariffs on U.S. imports to 125% on Friday after Trump's move to hike duties on Chinese goods. "China negotiations remain key for markets," Citi strategists said in a note.
Yahoo
11-04-2025
- Business
- Yahoo
Broadening asset volatility intensifies worries for tariff-tossed US stocks
By Lewis Krauskopf NEW YORK (Reuters) -Wild swings in global markets are poised to keep U.S. stock investors on edge in the coming week, as a weakening dollar and a selloff in Treasuries compound extreme equity volatility that erupted after President Donald Trump launched his sweeping tariffs. The S&P 500 was set for solid gains on the week after Trump pulled back on the heftiest tariffs on many countries, relieving Wall Street's worst-case scenario. Still, the benchmark index still was down about 13% from its February 19 all-time closing high. Concerns about lasting economic damage remained as the U.S. and China ratcheted up their trade battle and questions lingered over levies elsewhere as Trump only paused many of the most severe tariffs. Investors punished U.S. assets in the wake of Trump's tariffs, with the dollar plunging against other major currencies and benchmark U.S. Treasury yields, which move opposite to bond prices, surging. The stock market is "very unsettled" as investors weigh how to price in any economic fallout from the changing tariff backdrop, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. The market is "kind of trapped by the level of uncertainty that lurks out there," Luschini said. "And therefore investors are largely unwilling to make big bets in one direction or another." A volatile week in stocks was highlighted by Wednesday's 9.5% jump for the S&P 500, the index's biggest one-day rise since October 2008 during the heart of the financial crisis. The Cboe Volatility index, an options-based measure of investor anxiety, stood at around 40, more than twice its historic median level. Stock investors were warily watching moves across asset classes, in particular the dollar and Treasuries. An index that measures the dollar against a basket of currencies on Friday fell below 100 for the first time in nearly two years, while the yield on the benchmark 10-year Treasury was on pace for its biggest weekly jump in decades. In many prior risk-off events, the dollar and Treasuries have acted as safe havens, but that has not been the case over the last week as stocks have tumbled, said Walter Todd, chief investment officer at Greenwood Capital in South Carolina. 'We are the reserve currency and the risk free asset of the world, and our markets are not acting as such," Todd said. The yield on the 10-year Treasury on Friday topped 4.5%, which investors have cited as a level that could cause turbulence for stocks. Higher yields translate into higher borrowing costs for consumers and businesses, while potentially making bonds more competitive investments against stocks. "Until Treasuries stabilize and start to behave normally, risk assets will struggle," Barclays analysts said in a note on Friday. Quarterly U.S. corporate results in the coming week provide another test for investors. Goldman Sachs, Johnson & Johnson and Netflix are among the major U.S. companies set to report. Bryant VanCronkhite, senior portfolio manager at Allspring Global Investments, said he would be looking for companies which can show confidence in their businesses despite the shifting tariff landscape. "I'm looking for companies that have the competence and the desire to invest through this cycle," VanCronkhite said. Data on U.S. retail sales for March will shed light on the health of the consumer, but investors may discount the report to some extent because it covers a period before Trump's April 2 tariff announcement. A survey on Friday showed U.S. consumer sentiment fell sharply in April and 12-month inflation expectations surged to the highest level since 1981 amid unease over escalating trade tensions. Markets will remain highly sensitive to developments on the trade front. Investors will hope for evidence of progress between the U.S. and countries for which Trump has paused hefty levies for 90 days. The faceoff between the U.S. and China -- the world's two largest economies -- will also consume attention. Beijing increased its tariffs on U.S. imports to 125% on Friday after Trump's move to hike duties on Chinese goods. "China negotiations remain key for markets," Citi strategists said in a note. Sign in to access your portfolio
Zawya
11-04-2025
- Business
- Zawya
Investors grapple with tariff-driven economic threat as market swings persist
NEW YORK - Investors hoping for an end to wild market swings were reminded on Thursday that fallout from U.S. President Donald Trump's shifting tariff plans remains a threat to earnings and the economy, and could deal yet more punishment to equities. Relief over Trump's move on Wednesday to pull back on some of his heftiest global tariffs proved somewhat short-lived. Investors were unsettled by the escalating trade battle with China, the second-biggest provider of U.S. imports, while the president's 90-day pause on hefty levies elsewhere meant the tariff cloud was not going away anytime soon. "The worst-case scenario on trade has been avoided but it's not all as fine and dandy as we'd like it to be," said Michael Brown, senior research strategist at Pepperstone. "We've built in 90 days' worth of humongous uncertainty now." The S&P 500 ended down 3.5% on Thursday, after falling more than 6% during the session. A day earlier, the benchmark index soared 9.5%, which was its biggest one-day rise since October 2008 during the heart of the financial crisis. It is now down 14.3% from its February 19 record high. While Trump's move on tariffs opens the door to de-escalation, "that's not going to happen overnight," said Angelo Kourkafas, senior investment strategist at Edward Jones. Volatility spiked higher again on Thursday, with the Cboe Volatility index rising to as much as nearly 55 points, more than three times its median long-term level. The index, known as Wall Street's "fear gauge", in the past week has delivered some of its most elevated readings since the start of the COVID-19 crisis five years ago. The stock market has seen enormous swings since Trump announced his sweeping tariffs on April 2. On Wednesday, the S&P 500's 10.7% intraday range marked the fifth-largest one-day swing in at least the last fifty years. That stunning market rebound came after the index had been on the brink of confirming a bear market, sliding nearly 20% from its February high. Investors who may have regretted not selling earlier in the market's decline could have been taking advantage of Wednesday's huge gains to unload holdings on Thursday, said Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute. The selloff "shows you how many people are thinking, we're just not sure what is going to happen next, so we're going to just take the money and run," Samana said. ECONOMY WORRIES REMAIN Even as Trump eased back on the harshest trade measures for now, investors still worried about the fallout for the economy. "The drag from trade policy is likely to be somewhat less than before... (but) we still think a contraction in real activity later this year is more likely than not," JPMorgan analysts said. Despite the 90-day pause, the fact there is a baseline 10% tariff and other tariffs such as those on autos remain in place is not a good scenario, said Adam Hetts, global head of multi-asset at Janus Henderson. "Recession risk is much, much higher now than it was a couple weeks ago," Hetts said. The firm is advising investors to cut stock holdings and buy more investment-grade sovereign bonds as tariffs threaten to slow global growth, he said. As companies start reporting quarterly results in the coming days, investors are bracing for executives to offer little clarity about their outlooks because of the uncertain trade environment. In light of the sweeping tariffs, any details from companies about their supply chains and investment plans will be valuable, said Marta Norton, chief investment strategist at retirement and wealth services provider Empower. Any earnings disappointments posed a risk for stocks, Norton said, especially in light of the new trade regime corporations now face. "There's room for downside surprise," Norton said. (Reporting by Lewis Krauskopf; additional reporting by Lisa Pauline Mattackal, Suzanne McGee and Saeed Azhar; editing by Megan Davies and Nia Williams)
Yahoo
11-04-2025
- Business
- Yahoo
Analysis-Investors grapple with tariff-driven economic threat as market swings persist
By Lewis Krauskopf NEW YORK (Reuters) - Investors hoping for an end to wild market swings were reminded on Thursday that fallout from U.S. President Donald Trump's shifting tariff plans remains a threat to earnings and the economy, and could deal yet more punishment to equities. Relief over Trump's move on Wednesday to pull back on some of his heftiest global tariffs proved somewhat short-lived. Investors were unsettled by the escalating trade battle with China, the second-biggest provider of U.S. imports, while the president's 90-day pause on hefty levies elsewhere meant the tariff cloud was not going away anytime soon. "The worst-case scenario on trade has been avoided but it's not all as fine and dandy as we'd like it to be," said Michael Brown, senior research strategist at Pepperstone. "We've built in 90 days' worth of humongous uncertainty now." The S&P 500 ended down 3.5% on Thursday, after falling more than 6% during the session. A day earlier, the benchmark index soared 9.5%, which was its biggest one-day rise since October 2008 during the heart of the financial crisis. It is now down 14.3% from its February 19 record high. While Trump's move on tariffs opens the door to de-escalation, "that's not going to happen overnight," said Angelo Kourkafas, senior investment strategist at Edward Jones. Volatility spiked higher again on Thursday, with the Cboe Volatility index rising to as much as nearly 55 points, more than three times its median long-term level. The index, known as Wall Street's "fear gauge", in the past week has delivered some of its most elevated readings since the start of the COVID-19 crisis five years ago. The stock market has seen enormous swings since Trump announced his sweeping tariffs on April 2. On Wednesday, the S&P 500's 10.7% intraday range marked the fifth-largest one-day swing in at least the last fifty years. That stunning market rebound came after the index had been on the brink of confirming a bear market, sliding nearly 20% from its February high. Investors who may have regretted not selling earlier in the market's decline could have been taking advantage of Wednesday's huge gains to unload holdings on Thursday, said Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute. The selloff "shows you how many people are thinking, we're just not sure what is going to happen next, so we're going to just take the money and run," Samana said. ECONOMY WORRIES REMAIN Even as Trump eased back on the harshest trade measures for now, investors still worried about the fallout for the economy. "The drag from trade policy is likely to be somewhat less than before... (but) we still think a contraction in real activity later this year is more likely than not," JPMorgan analysts said. Despite the 90-day pause, the fact there is a baseline 10% tariff and other tariffs such as those on autos remain in place is not a good scenario, said Adam Hetts, global head of multi-asset at Janus Henderson. "Recession risk is much, much higher now than it was a couple weeks ago," Hetts said. The firm is advising investors to cut stock holdings and buy more investment-grade sovereign bonds as tariffs threaten to slow global growth, he said. As companies start reporting quarterly results in the coming days, investors are bracing for executives to offer little clarity about their outlooks because of the uncertain trade environment. In light of the sweeping tariffs, any details from companies about their supply chains and investment plans will be valuable, said Marta Norton, chief investment strategist at retirement and wealth services provider Empower. Any earnings disappointments posed a risk for stocks, Norton said, especially in light of the new trade regime corporations now face. "There's room for downside surprise," Norton said. Sign in to access your portfolio
