Market Resilience

- Advertisement -


- Advertisement -

key takeaways

  • Market’s reverse loss on Wednesday
  • interest rates are coming down
  • Volatility still remains high

Wednesday morning looked a bit gloomy as the market was down. Until we closed; However, the markets remained largely flat for the day. Although the gain of nothing may not sound particularly exciting, the market was able to erase the initial losses, was encouraging. In the overnight session, we saw similar action. S&P 500 futures, which were trading as low as 3735, rebounded as overseas markets opened and rose in early trade.

- Advertisement -

In a recent trying market, these types of reversals offer little optimism. It is also worth noting that volatility, which was recently as high as 35 on an intraday basis, is now below 30. This does not mean that the markets are giving a clear signal, but it is worth noting when sellers run out of steam and volatility contracts.

Bonds are showing good growth in the Treasury market. Rates on the 30-year bond are currently at 3.22% after hitting a high of 3.46%, while the 10-year note is now trading at 3.13%. Last week, the Fed announced a 75 basis point increase in interest rates and has signaled a willingness to do whatever is necessary to rein in inflation. That we are actually seeing rates fall may indicate that the market is less concerned about how aggressive future hikes may be. Today also concludes Fed Chairman Powell’s two days of testimony before Congress and markets will parse his testimony for any indication of future Fed plans.

While these are all encouraging signs, we need to remember that the VIX is still trading higher relative to its historical mean. Therefore, the potential for continued choppy trading still exists. It is always important to stick to your gameplan and be mechanical with business decisions. When emotions start to dominate decisions, only then does the risk increase.

For educational purposes only, TastyTrade, Inc. Commentary.

Credit: www.forbes.com /

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox