Home
About
Mid-Week Market Minute 8.7.24

Mid-Week Market Minute 8.7.24

August 7, 2024 Market Updates

Markets Snap Losing Streak on Tuesday

It’s been a volatile week for both stocks and bonds, as markets were able to snap a three-day losing streak on Tuesday, recovering some of Monday’s sharp sell-off. As of Wednesday morning, both U.S. and international stocks were lower by about 1% on the week. In Japan, the Nikkei 225 index rallied more than 10% on Tuesday after experiencing a more than a 12% sell-off on Monday, the worst single-day of trading for the index since Black Monday of 1987.

In bonds, we’ve seen a significant rally (decline) in interest rates over the past couple of weeks. The yield on the 2-year and 10-year Treasury notes currently are trading around 4% and 3.94%, respectively. For reference, at the beginning of July, those same rates were approximately 4.75% and 4.43%. This has translated into positive total returns of approximately 3% for the taxable bond index since the end of June. It is important to remember that bonds can reduce portfolio volatility and often provide ballast against a declining stock market.

The past week brought significant uptick in expected volatility. On Monday, the VIX (volatility index) jumped briefly to a level of 55, before settling around 23 on Wednesday. The VIX helps investors quantify market expectations for volatility and can provide useful insights into market sentiment. Prior the last week, the VIX index had spent most of the year trading in a range of about 12-15, well below the historical average of around 19. Given the uncertainty surrounding the state of the U.S. economy, monetary policy, and geopolitics, we would expect volatility to remain elevated for the foreseeable future.

Source: GSAM, CNBC, JPMorgan, FactSet

This communication is for informational purposes only. It is not intended as investment advice or an offer or solicitation for the purchase or sale of any financial instrument.

Indices are unmanaged, represent past performance, do not incur fees or expenses, and cannot be invested into directly. Past performance is no guarantee of future results.