High stock market valuations and slowly rising interest rates could mean lower long - term returns as well
as higher market volatility.
Not exact matches
They're just
as applicable in low -
volatility markets as they are in the
higher volatility markets with big swings.
«While common wisdom has it that
higher volatility necessarily signals a discrete end to the [bull
market], it is often the case that
higher vol is a natural occurrence in the «late innings» of extended rallies, particularly when the Fed is raising rates,
as was the case in late 1999 - 2000,» he wrote.
Europe shares closed slightly
higher on Tuesday afternoon
as investors reacted to fresh data from China and
volatility in currency
markets.
Yet its persistence and
volatility — from
as low
as 1.8 percent to
as high as 13 percent — indicate how a
market that's captured Wall Street's attention can still be slow to homogenize.
He said emerging
markets return projections would be at least
as high as EAFE, but with more
volatility.
«Asset values such
as the stock
market are at all - time
highs, every major industry around the world last year grew by more than 20 percent,
volatility is at an historic low.
Actual results, including with respect to our targets and prospects, could differ materially due to a number of factors, including the risk that we may not obtain sufficient orders to achieve our targeted revenues; price competition in key
markets; the risk that we or our channel partners are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders
as we experience wide fluctuations in supply and demand; the risk that our commercial Lighting Products results will continue to suffer if new issues arise regarding issues related to product quality for this business; the risk that we may experience production difficulties that preclude us from shipping sufficient quantities to meet customer orders or that result in
higher production costs and lower margins; our ability to lower costs; the risk that our results will suffer if we are unable to balance fluctuations in customer demand and capacity, including bringing on additional capacity on a timely basis to meet customer demand; the risk that longer manufacturing lead times may cause customers to fulfill their orders with a competitor's products instead; the risk that the economic and political uncertainty caused by the proposed tariffs by the United States on Chinese goods, and any corresponding Chinese tariffs in response, may negatively impact demand for our products; product mix; risks associated with the ramp - up of production of our new products, and our entry into new business channels different from those in which we have historically operated; the risk that customers do not maintain their favorable perception of our brand and products, resulting in lower demand for our products; the risk that our products fail to perform or fail to meet customer requirements or expectations, resulting in significant additional costs, including costs associated with warranty returns or the potential recall of our products; ongoing uncertainty in global economic conditions, infrastructure development or customer demand that could negatively affect product demand, collectability of receivables and other related matters
as consumers and businesses may defer purchases or payments, or default on payments; risks resulting from the concentration of our business among few customers, including the risk that customers may reduce or cancel orders or fail to honor purchase commitments; the risk that we are not able to enter into acceptable contractual arrangements with the significant customers of the acquired Infineon RF Power business or otherwise not fully realize anticipated benefits of the transaction; the risk that retail customers may alter promotional pricing, increase promotion of a competitor's products over our products or reduce their inventory levels, all of which could negatively affect product demand; the risk that our investments may experience periods of significant stock price
volatility causing us to recognize fair value losses on our investment; the risk posed by managing an increasingly complex supply chain that has the ability to supply a sufficient quantity of raw materials, subsystems and finished products with the required specifications and quality; the risk we may be required to record a significant charge to earnings if our goodwill or amortizable assets become impaired; risks relating to confidential information theft or misuse, including through cyber-attacks or cyber intrusion; our ability to complete development and commercialization of products under development, such
as our pipeline of Wolfspeed products, improved LED chips, LED components, and LED lighting products risks related to our multi-year warranty periods for LED lighting products; risks associated with acquisitions, divestitures, joint ventures or investments generally; the rapid development of new technology and competing products that may impair demand or render our products obsolete; the potential lack of customer acceptance for our products; risks associated with ongoing litigation; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report on Form 10 - K for the fiscal year ended June 25, 2017, and subsequent reports filed with the SEC.
Stocks are falling
as traders worry about rising interest rates, and
volatility as measured by the VIX has jumped to its
highest since the
market turmoil of August 2015.
The
market volatility index, otherwise known
as the VIX and even better known
as the fear gauge — a measure of the expected
volatility of U.S. stocks — has surged to the
highest level in more than two years.
The stock
market opened way down, continuing last Friday's selloff, though it has climbed back since the open — implying the return of
volatility —
as skittish investors continue to fear the sequence I describe in this AM's WaPo: tight labor
market, wage pressures,
higher interest rates, inflation, lower profit margins.
Higher volatility is likely across financial
markets, especially in the first and second quarters
as new policies and their implementation come into focus.
They also developed new rules, known
as circuit breakers, allowing exchanges to halt trading temporarily in instances of exceptionally large price declines.12 For example, under current rules, the New York Stock Exchange will temporarily halt trading when the S&P 500 stock index declines 7 percent, 13 percent, and 20 percent in order to provide investors «the ability to make informed choices during periods of
high market volatility.»
As you can see, the Achievers stared performing well after the
market experienced
higher volatility.
And,
as noted by Christopher Metli, in our Institutional Equity Division, there was an unusually
high number of
volatility shorts in the
market heading into this week, which may help to explain (some of) the large swings in VIX.
As a result of
higher exchange rate
volatility, both during the crisis and subsequently,
market participants and policymakers became keenly aware of the need for better exchange rate risk management.
In
high -
volatility markets, you may want to consider going
as high as 75 %.
The Japanese yen has always been a strong performing currency, often looked to
as a safe option during times of
high volatility in the forex
markets.
The most significant problem, however, is that the
market is strenuously overbought here, and many precarious technical conditions (such
as an extremely low option
volatility index - the VIX - and an extremely
high McClellan Oscillator) are in place.
Indeed, once our estimated
market return / risk profile is strictly negative (
as it is at present), the negative implications for the S&P 500 aren't affected by the position of the
market relative to that average, except that the
market tends to experience
higher volatility once the
market breaks that average.
Higher oil prices would reinforce current
market trends based on reflation: rising long - term bond yields and a shift out of perceived safer assets — bond proxies and low -
volatility stocks — and into cyclical assets such
as EM.
Traders should anticipate
higher volumes early this week with
volatility tempering down
as the Christmas holiday slows
market activity.
The strength of Amazon and Netflix — both of which are classified
as consumer - discretionary names,
as opposed to technology — means that despite the
high volatility of the FAANG group overall, the quintet has generally been a positive force in the
market.
As the Fund tracks the US stock
market excluding the S&P 500 Index, which comprise 500 large cap companies, the companies tracked by the Fund would be significantly smaller in
market capitalization, and would tend to be less mature with
higher volatility.
The resulting new
market structure, including a troublesome feature known
as the ETF / underlying security liquidity mismatch, have yet to be truly tested by a bear
market, recession or
higher levels of
volatility.
«While
high - yield
volatility has startled some, we view it
as a natural
market correction.
Now,
as many investors worry about a global growth slowdown, rising rates and
higher volatility in U.S. equity
markets, dividend growers offer potential opportunities due to their healthy balance sheets,
as well
as better valuations, and lower
volatility.
As equities have ground ever
higher over the past year, very large short -
volatility positions have been building in the
markets — largely in
volatility - targeting strategies employed by institutional investors and leveraged exchange - traded products geared toward individuals.
Low
volatility was a major
market theme last year
as asset prices marched to new
highs that were seemingly unchallenged, despite political uncertainties and various geopolitical events.
Underlying
high - yield
volatility has increased slightly during the past five - plus years
as ETFs have experienced rapid growth and their influence has increased in the
market.
Volatility soared when the United Kingdom voted to exit the European Union (EU), with the VIX index of U.S. equity market volatility spiking to near 2016 highs, as Bloomberg d
Volatility soared when the United Kingdom voted to exit the European Union (EU), with the VIX index of U.S. equity
market volatility spiking to near 2016 highs, as Bloomberg d
volatility spiking to near 2016
highs,
as Bloomberg data shows.
But it is also important to remember that
volatility has been
high in the retail sector this year, with the index seeing large price swings
as markets try to determine winners and losers in an industry where price competition is intense, and the line between online and brick - and - mortar companies continues to blur.
The
higher level of predictability serves
as the fundamental foundation for lower
volatility across a full
market cycle.
However, note that
volatility is extremely
high at the moment, and even though the
market is bullish, a price correction attempt will emerge sooner or later,
as speculators and traders collect their profits.
We favor a more even yield - curve exposure today (with positions across maturities) and a more defensive (
higher - quality) credit profile —
as volatility and heightened credit concerns could lead to significantly wider spreads in the
high - yield - bond
market.
The Cboe
Volatility Index (VIX) rocketed
higher this year
as the U.S. stock
market witnessed its steepest decline in two years.
Volatility cycles between
high and low periods, just
as all
market cycles undergo some degree of change either through external stimuli or evolution.
History shows that times of
high market volatility are good times to be in growth investments such
as dividend - paying stocks.
Finally,
as we see
higher levels of stock
market volatility,
high yield
volatility is likely to rise
as well.
It's also important to have a good command of your platform,
as markets tend to move faster during periods of
high volatility.
We expect
markets to be characterized by a
higher level of
volatility as central banks allow
market forces to dictate valuations.
As you can see,
high price
volatility is associated with bear
market bottoms.
Canadian stocks (
as measured by the S&P / TSX 60 Index), on the other hand, had returned 3.72 percent and 8.45 percent respectively during the same time periods albeit at a much
higher volatility including a significant stock
market crash.
For example, you would not use the same stop loss distances or profit targets in a
market that has very low
volatility as you would in one with
high volatility.
Higher volatility is likely across financial
markets, especially in the first and second quarters
as new policies and their implementation come into focus.
Trading penny stocks takes an incredible amount of knowledge and experience
as their
higher levels of
volatility and
market movement make them an extremely risky investment.
The
market volatility index, otherwise known
as the VIX and even better known
as the fear gauge — a measure of the expected
volatility of U.S. stocks — has surged to the
highest level in more than two years.
This second dimension is underappreciated
as global
markets grind
higher with little
volatility.
We also compared the five - year annualized
volatilities of the S&P Pan Asia Bond Index (denominated in USD) with other major bond
markets, such
as the U.S. treasury, U.S. investment grade corporate, U.S.
high yield corporate, Eurozone sovereign and Australian bond
markets, see the exhibit below.
Now,
as many investors worry about a global growth slowdown, rising rates and
higher volatility in U.S. equity
markets, dividend growers offer potential opportunities due to their healthy balance sheets,
as well
as better valuations, and lower
volatility.