Shifts in Equity Volatility: Are Downside Risks Emerging?
Implied volatilities surged following a hawkish FOMC meeting last month. Since then, divergences have appeared, particularly a notable spike in the VIX index on December 18. This performance contrasted sharply with the SPX index sell-off. Investors should assess the implications of these volatility shifts on market trends. Understanding these emerging risks is critical for adapting investment strategies. Keeping a close watch on volatility indicators and their effects will help market participants navigate potential fluctuations ahead.
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