Market Update

  • Geopolitical tensions rise over North Korea & Syria
  • March US non-farm payrolls reading disappoints
  • FOMC minutes spark equity declines
  • Eurozone PMI data reaches multi-year high
  • South Africa’s sovereign credit rating downgraded

Alex Harvey (CFA) of Momentum Global Investment Management shares his view:

The world is never short of risk it seems but sometimes markets suggest it is.  There has been plenty of recent commentary highlighting how low the ‘VIX’ has fallen, an index sometimes known as Wall Street’s ‘fear gauge’ which measures the market’s expectation for the volatility of the S&P 500 index over the next 30 days.  It is an implied risk measure derived from option prices on the index, itself a function of the underlying stocks’ expected volatility and the correlations between them.  Certainly it remains low in its historical context and even President Trump’s missile launch into Syria last Thursday had limited impact.  Today, the VIX trades above 13% after briefly dipping under 10% in February, but with a lifetime low of 9.3% we remain at the lower end of the range.

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