Six Years Of Buy The Dip Keep Stocks Calm As Other Markets Erupt
By Callie Bost
(Bloomberg) — The new haven trade is equities.
So suggests the Chicago Board Options Exchange Volatility Index, the gauge of stock market anxiety that has plunged 39 percent since January even as turbulence engulfed currencies, commodities and bonds. Compared with foreign exchange, U.S. shares are the calmest since 2006, with the Standard & Poor?s 500 Index hovering about 26 points from a record.
Peace persists in a market where six years of gains taught investors to treat dips as buying opportunities. At the same time, central bank actions and speculation about when the U.S. Federal Reserve will raise interest rates are exerting pressure on currencies and commodities that has yet to filter into stocks, said Max Breier at BMO Capital Markets Corp.
?Volatility sensitivity is ranked upward from U.S. dollar sensitivity, with equities being the least sensitive,? Breier, a senior equity derivatives trader at BMO, said by phone. ?Most of the non-equity asset classes are reacting to U.S. dollar sensitivity.?
The S&P 500 rose less than 0.1 percent to 2,092.16 at 9:43 a.m. in New York. The VIX added 1 percent to 13.75.
To Read More Click Here