Abstract
After a principally calm first six weeks of the yr — when the key benchmark indices had been up nearly 5% and the VIX Volatility Index dipped under 15 — the closely-watched “concern index” just lately soared past 27 and the S&P 500 has plummeted 8%. Are traders headed for a market correction or perhaps a go to from the bear? Not essentially. However simply because equities gave the impression to be solidly in a bull market, that does not imply there aren’t dangers to investing. Certainly, in our 2025 Market Outlook, we famous that investor complacency was excessive, the tariffs and commerce wars may sluggish the economic system, and that inventory valuations had been inclined within the occasion of a sell-off within the Info Expertise sector. That was our bearish case. Our base case referred to as for an additional yr of development within the U.S. economic system (and no recession), declining rates of interest, and double-digit EPS development. Every of the planks within the platform is at the moment in place. So assuming that the Trump Administration will get its financial development plans on observe, there’s cause to count on fairness costs can get well. Again to the market, the present concern index studying is round 25, which is nicely above the 10-year common of 20 and almost one customary deviation (sigma = 7.5) above regular. This studying compares to the common VIX of 24 in the course of the most-recen