Falling VIX Can Unlock Higher Levels for S&P 500, Evercore Says
- Rich Ross says fear gauge dropping could be ‘huge for risk’
- Mizhuo argues odds of volatility spike may be underappreciated
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Stock volatility is dropping toward levels that could further encourage U.S. equity bulls even as warnings about complacency continue to hang over the rally from March’s lows.
The Cboe Volatility Index, a measure of implied equity swings, is now one-third the level reached at the height of the Covid-19 market uncertainty. A move lower would be a bullish sign for U.S. stocks, according to Evercore ISI. But Mizuho Bank Ltd. says it’s also possible investors don’t fully appreciate the chances of sharp swings in markets awash with stimulus.