Sandy Made No Storm in the Markets, Waiting for Elections
Sandy, Elections, and S&P500
As horrible as it has been in the real world, hurricane / post-tropical cyclone / storm Sandy has not caused any storm in the global financial markets, besides the fact that the New York Stock Exchange was closed for unprecedented two days due to weather, this Monday and Tuesday.
During the rest of the week volume was rather low and ranges also below average to normal at most. Nevertheless, we have seen the S&P500 touching the low of the previous 1430-1470 range, which it had broken out from the week before, only to fall back to the 1410’s again on Friday. It closed the week at 1414.20, mere 2.26 points higher.
The markets are now driven (or non-driven) by the combination of post-Sandy return to normal operations (which isn’t and won’t be immediate for some market participants) and US elections due next week, potentially a big market moving event.
The VIX (CBOE Volatility Index) added up to 1 point on Wednesday when the markets reopened, but then it lost on Thursday with equities rising. On Friday it was just above 16 at open, the lowest since 19 October. It was rising throughout the morning and afternoon trading and closed at 17.59, down only 0.22 for the week.
VIX Futures Curve Almost Unchanged
VIX futures curve has not changed much this week, only the short end lost 0.30-0.35. It had moved higher on Wednesday with spot VIX rising, then fell up to 1.2 points below the previous Friday levels, and recovered during Friday trading in line with spot VIX.