Abby Normal – Is volatility the new market norm?

When an asset rises in value for over 400 business days, it is normal to pause to reassess. The past two weeks, but in particular the last five trading days has delivered the most volatile trading ranges in recent history. The S&P 500 is used as a proxy for the American economy. Enjoy the article from wealthmanagement.com who explores a perspective.

There is a general consensus that global stock markets were due for a healthy pullback triggered by overall inflationary fears and rapidly rising long-bond yields. The normal reality of between two to five, 2% to 5% stock market declines across an economic cycle has evolved to what appears to be a more compacted, less frequent yet more significant declines as explored by seekingalpha.com. “How about if we normalize the data to the value of the S&P 500? Well, the most volatile day in the past week, February 6, 2018, is ranked only 156th in S&P 500’s history, with a 4.08% swing in intraday range. The top-ranked intraday swing is, you guessed it, Black Monday 1987 with a 22.80% difference between the high and low prices of the day.” Food for thought and more comparisons in the article from SeekingAlpha.

Volatility of S&P 5000 In February From SeekingAlpha.com