Blackrock's Russ Koesterich believes low volatility in the markets is reflective of investor complacency

Livewire News

Livewire

Blackrock's Russ Koesterich believes low volatility in the markets is reflective of investor complacency. Year-to-date, market volatility is around 14, compared to historical average of around 19. More recently the VIX Index has dropped as low as 12, approaching the multi-year lows seen in March and August. Koesterich believes that to a certain extent these low levels are justified. Strong market momentum and easy credit conditions are two factors highly correlated with low volatility. The problem today is that even after accounting for strong momentum and benign credit conditions, volatility looks unjustifiably low. Koesterich warns that investors should be wary of looming political instability. Historically, when political and policy uncertainty is elevated, volatility has been higher. The current low levels of volatility indicate markets are overlooking a number of issues in Washington that may result in a spike in volatility. (VIEW LINK)


Livewire News
Livewire News
Livewire

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment