wrote this morning:
The panic has subsided.
Four consecutive advances in the Standard & Poor?s 500 Index (SPX) have pushed the gauge up 4.2 percent since Oct. 15, recouping half the losses from a selloff that began in mid-September. After surging to a 28-month high last week, the Chicago Board Options Exchange Volatility Index (VIX) has fallen at least a point a day starting Oct. 16, reflecting a dissipation of investor concern that hasn?t occurred in five years.
Investors flocking back to equities are asking what changed to ignite a plunge that erased $2 trillion from American stock values. While falling oil prices spurred a 20 percent drop in energy producers, cheaper fuel is now underpinning a rally in airlines and railroads that is approaching 10 percent. Data showed gains in home sales and consumer confidence and earnings from Apple Inc. (AAPL) to Morgan Stanley exceeded analyst estimates.
?It?s not like we suddenly had a different macro-economic picture,? Justin Golden, a partner at Lake Hill Capital Management LLC in New York, said by phone. ?The markets started to roll over and there was forced panic.?
The 7.4 percent S&P 500 plunge to a six-month low that began Sept. 18 was triggered by selling in leveraged hedge funds, BlackRock Inc. Chief Executive Officer Larry Fink told Bloomberg TV yesterday. He said he would be buying equities now as a long-term investor and that earnings have been good.
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