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Low VIX Signals Bull Market Still Intact Despite Mounting Risks

  • The CBOE Volatility Index (VIX) recently closed at a post-pandemic low, signaling the bull market is still intact.

  • This is despite concerns about inflation, rising yields, poor seasonality, labor strikes, and mega-cap concentration.

  • DataTrek believes the low VIX means these risks aren't enough to derail strong corporate earnings.

  • The VIX also suggests investors aren't worried about an imminent recession in the next 1-2 years.

  • Analysts raising earnings estimates for the S&P 500 for 2023-2025 is another bullish sign for stocks long-term.

businessinsider.com
Relevant topic timeline:
The U.S. stock market experienced a milder bear market in 2022 compared to historical bear markets, with a decline of 25% from its prior high, and history suggests that a new bull market is likely to follow soon.
Bank of America believes that the stock market will continue to rise as investors' bullish sentiment contradicts their conservative portfolio positioning, suggesting there is still upside potential until hedge funds increase their exposure to cyclical and high-beta stocks and economic conditions deteriorate considerably.
Investors should buy stocks during the August market weakness as the current pullback is just a healthy correction in a bull market, supported by economic resilience, technical analysis indicating an upward trend, insiders turning more bullish, and cautious investor sentiment.
Stocks bounce back after weak job opening data, but achieving positive returns for the month remains uncertain due to market uncertainties and unanswered questions about the strength of the consumer and investor behavior. Hedge funds are increasingly taking on risk, but are still below exuberance levels, according to Société Générale.
The fundamentals and technicals support a demographically driven bull market in stocks until 2034, but potential risks include inflation, interest rate-induced debt crisis, and refinancing problems, which could lead to a drop in the stock market. Comparing the S&P 500's score in August 2023 to historical patterns, the market seems confident and not indicating an imminent debt crisis or severe recession. Credit spreads also appear tame compared to previous crisis periods. However, the article notes the possibility of abrupt changes in the market and encourages openness to a wide range of outcomes.
Investors are bullish on the market in 2023, with the Nasdaq Composite up 30% and two leading ultra-growth stocks, Amazon and Apple, poised to benefit from improving market conditions and their strong positions in multiple industries.
Despite a decline in August, the US market is still in good shape, with a correction in stocks being viewed as a normal breather rather than the start of a bear market, while various trends and indicators suggest a continuation of the bullish trend.
The stock market is still in an uptrend despite a recent pullback, and there is a likelihood of higher stock prices in the near term as long as the market continues to advance within its uptrending channel. Additionally, the recent breakout in the S&P 500 is a bullish sign for the market, and commodity-related stocks have begun to outperform, making them attractive investments.
Stocks have been languishing recently as the positive sentiment around the "Goldilocks economy" fades, with market psychology and lingering negativity among investors being contributing factors.
The stock market has been stable recently, but it is expected to experience increased volatility in the future.
Despite the pressure on the market, the major US equity indexes have held steady near their recent highs, with the S&P 500 up 16.21% year to date and the Nasdaq Composite up 31.6%, raising questions about whether the current market weakness is due to seasonality or potentially something more significant like inflation.
A period of higher interest rates won't derail the bull market in stocks, as historical analysis shows that the stock market performs well during elevated interest rate periods, with slightly lower but less volatile returns compared to lower interest rate periods, according to BMO's chief investment strategist Brian Belski.
US stocks remain steady as investors anticipate the Federal Reserve's interest rate decision and closely watch negotiations in the US auto workers strike.
The stock market weakened slightly as investors remain uncertain ahead of the Federal Reserve's meeting this week, with eyes on the tone taken by Federal Reserve Chair Jerome Powell during the post-meeting media conference.
The article discusses how the historically volatile week will test the bull market in stocks.
Market volatility in 2023 has reached its lowest point since 2020, with the CBOE Volatility Index (VIX) falling to pre-pandemic levels, and factors such as moderating inflation and a strong labor market contributing to the market's relative calmness.
Stocks may be experiencing a temporary pullback, but it is not a signal of a bear market, and a bull market may still be continuing; making the mistake of not positioning for long-term bullishness could result in significant financial losses.
The recent market pullback continues as the S&P 500 is down 2.9% for the week and 5.9% below its high-water mark, but the broadening of market participation is a positive indicator for the sustainability of the bull market.
Despite the uncertainty surrounding the Federal Reserve's interest rates and the potential for a recession, the market has remained resilient and has not overreacted to the news.
Bitcoin and other cryptocurrencies remain stable or slightly higher despite turbulence in the stock market, but this calm may not last.
The stock market's bull case depends on the S&P 500 breaking above a key level for continued gains.
Despite recent challenges and concerns in the tech industry, analysts remain bullish on Nvidia stock, citing its impressive year-to-date rally and demand for its advanced AI chips as reasons for optimism. Wall Street expects continued upside in the stock and predicts that the demand for Nvidia's chips will drive long-term revenue and earnings growth.
The recent two-week selloff in the stock market confirms a weak market and raises the possibility of new lows, indicating that the so-called bull market was just a rebound and the next bull market will be driven by different factors. Investors should focus on traditional fundamentals and cash reserves rather than poor investments.
Investors should remain bullish on US large cap stocks due to several factors, including the S&P 500's strength, high cash yields driving consumer spending, a strong economy, favorable stock valuations despite high interest rates, and relatively cheap equal-weighted stocks.
Stocks on Wall Street experienced a selloff as rising Treasury yields and hawkish comments from Federal Reserve policymakers put pressure on investors and dampened appetite for stocks, with the S&P 500 and Dow Jones Industrial Average both dropping around 1.1% and the Nasdaq Composite down over 1.5%; however, stocks somewhat recovered from their lows in midday trading as investors digested fresh comments from Cleveland Fed President Loretta Mester.
The S&P 500's stability at the 4,200 level is crucial for determining the continuation of the bull market, with chartists and investors closely monitoring the 200-day moving average and potential implications for long-term trends and investor sentiment.
Bitcoin's bull market is expected to reignite as the Federal Reserve is predicted to resume printing money, leading to a surge in Bitcoin's price, according to BitMEX founder Arthur Hayes.
Despite challenges such as surging Treasury yields and Federal Reserve hawkishness, the equity-investing landscape has shown resilience, with the S&P 500 posting modest gains and the Nasdaq 100 up for the week. Investors remain optimistic about the economy's ability to withstand higher borrowing costs and anticipate positive revenue and earnings growth. Credit markets have remained stable, while volatility has remained muted and profit strength in Corporate America is expected to drive stocks.
The S&P 500 has entered a bull market, marking a rise of 20% or more from its recent low, with hopes that the economy will continue to defy predictions of a recession caused by high inflation and aggressive measures taken by the Federal Reserve. However, concerns remain as the Fed is expected to continue hiking interest rates and the gains in the market have mainly been driven by a small group of stocks, raising sustainability concerns. Bull markets typically last around 5 years with gains of 177.8%, while the previous bull market lasted 21 months and the current one began on Oct. 13, 2022. The recent bear market ended on Oct. 12, 2022, with a duration of nine months and a drop of 25.4%.
WTI crude oil has experienced increased volatility, leading to discussions about whether the market is broken, but from a structural perspective, both the noncommercial and commercial sides of the market remain bullish and the market is working as it should.
The current rally in stocks since October 2022 is one of the weakest bull markets on record, with elevated valuations and monetary tightening measures limiting upside potential, according to Ned Davis Research.
A bullish formula for the stock market is emerging as the economy grows, with positive GDP growth, improving earnings, and a paused Federal Reserve leading to a bullish outlook for stocks, according to JPMorgan. The Nasdaq 100 Index is also following a similar playbook from 1999, although JPMorgan is not predicting a repeat of the mind-boggling year-end rally seen in 1999.
Market sentiment indicators suggest that the recent decline in the stock market may be the beginning of a larger bear market, although some indicators still signal bullish sentiment.
The S&P 500 celebrated its first anniversary since reaching its bear-market low, but some experts argue that the market's weak performance in the past year may not qualify it as a strong bull market just yet.