Volatility Threatens the Stock Market

As of May 2019, the stock market is at its worst position since December 2008. Back in 2008, there was a big financial crisis and it was the worst trading year. But, in May 2019, the stocks aren’t as shiny as they were.

The whole problem started with the potential Sino-American trade conflict. With the recent trade war between the USA and China, and lackluster negotiations, the tariffs on Chinese imports will rise to 25% from 10%. But, Liu He, China’s top negotiator will participate in talks during the second week of May, which can bring some good news.

Cboe Volatility Index

Cboe volatility index is also known as VIX and is referred to as “Wall Street’s fear gauge”. Its value of -1.55% in May 2019, was on a great way to its huge monthly gain. To be precise, 61% since a 75% surge in October 2018. The main thing with VIX is that it moves in the opposite direction of stocks. This is because it reflects the possibility of a downturn in the market.

Thankfully, it’s at its steady level from the beginning of 2019.

Stock Market News – S&P 500 in Energy Sector

In the first half of 2019, oil had a rough time, with the exchange-trade Energy Select Sector SPDR ETF XLE, +0.27%. Its monthly retreat of 4.6% in May 2019 marks the worst month since the drastic decrease of 13.3% in December 2018.

The crude-oil prices CLM9 +1.11% have seen an increase in 2019. Analysts say that these statistics can give prosperity in an environment with constant, yet steady oil demand.

Varying Stock

At the beginning of May 2019, the Dow Jones Industrial Average, DJIA +0.56% saw a little decline and was off 530 points. However, with the numerous wobbles on a daily basis, the Dow could reach its all-time record soon.

To put things into perspective, the Dow is up 11%, Nasdaq is up 19.6%, and S&P 500 saw a 14.6% gain in the first half of 2019. Source: Marketwatch

Disclaimer: The information on this site is provided for discussion purposes only, and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities.