October is here, and volatility is back in a big way. The Volatility Index
(VIX) popped back up above 22 this morning to a fresh, 52-week high, which
shows that the “risk off” trade is clearly back in play. The broader stock
market is relatively flat at midday, although the tech-rich Nasdaq is off
about 1% on weakness in the semiconductor sector. Oil prices remain weak, as
oil has dropped to its lowest level since November of 2012, and we are
seeing global money flow into U.S. Treasuries. The yield on the 10-year
Treasury dipped down to 2.30%, showing that the “safe haven” mentality is in
motion as well, on this second Friday of October.
It has been a rough week for the stock market, and the bulls are still
hoping for a late-day rally to close out the week on a positive note. Global
shock worries are back on the radar, and there is no bigger one than the
ongoing morphing of the Ebola outbreak into a potential global tragedy.
Investors are clearly nervous, and that makes it hard for buyers to step in
on a Friday afternoon, so we will just have to see how the day unfolds.
October is acting like an October right now, so let’s hope we can finish the
day strong and to the upside.