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Stock Volatility: Back With A Bang And Here To Stay - Kitco

Stock Volatility: Back With A Bang And Here To Stay - Kitco

Release Date:  Friday, February 23, 2018

Stock Volatility: Back With A Bang And Here To Stay - Kitco
Even with equities already recovering more than half the ground it lost in recent selloffs, traders have dialed down their fear that the U.S. stock markets are unlikely returning to their unusual calm conditions of last year.

“Stock market volatility spiked to a multi-year high in the selloff and some products that flourished in low volatility collapsed. A higher-volatility environment means the 1 percent stock market swings of the past two weeks will become commonplace, strategists said.

“It is something that investors will have to get used to. The Cboe Volatility Index .VIX, the most widely followed barometer of expected near-term volatility for stocks, last year logged a historically low average of 11.

“’We expect the current shock to herald a higher volatility regime,’ said Jim Strugger, derivatives strategist at MKM Partners in New York.

“’Fear has come down dramatically but certainly not to the level of complacency seen pre-correction,’ said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

“’You are probably going to be bopping up and down based on stuff that happens,’ said Phil Orlando, chief equity market strategist at Federated Investors in New York.

“Several high-profile U.S. investors including Jeffrey Gundlach, known as Wall Street’s Bond King, and hedge fund manager Douglas Kass from Seabreeze Partners Management Inc see more stress ahead for stocks.

“’The velocity of the shift is what really matters here,’ said Michael Purves, chief global strategist at Weeden & Co. ‘And the velocity of that shift is slow.’

“Ever-growing herds of volatility sellers and investors looking to buy the dip have quashed each instance of higher volatility over the last few years.

“Despite the recent shock that led to the shuttering of popular exchange-traded products used to bet on stock market calm, traders are pouring money into that trade again.

“But things may be a little different this time. The Federal Reserve is shrinking its balance sheet and raising interest rates. U.S. corporate earnings could be the other factor to watch.

“’When earnings growth starts to roll over and go from positive growth to negative growth, a deceleration, you see volatility increase in the market place,’ said Nick Kalivas, senior equity product strategist at Invesco PowerShares, in Chicago.

“’I have been counseling clients to think about using products like low volatility or quality to help essentially mitigate some of the downside risks that are present,’ he said.” (“Stock Volatility: Back With A Bang And Here To Stay.” Kitco 02.18.18)

Why North Korea And America Could Be At War By April – Fox News
Despite the media’s endless fawning over all things North Korea during the Winter Olympics, the Kim regime’s quest for nuclear weapons and missiles that can strike the U.S. is growing more powerful day by day.

“From North Korea’s perspective, the regime looks at nuclear weapons as the ultimate guarantor of its survival, even enshrined in its constitution. Kim Jong Un correctly understands that his chances of someday ending up in The Hague for war crimes like Slobodan Milosevic or dead and buried like Mullah Omar, Saddam Hussein or Muammar Qaddafi rise exponentially without atomic arms.

“Nations that continue to trade with Pyongyang or evade sanctions must be held to account. If China and Russia, for example, continue to go around UN Security Council sanctions – sanction they voted for – they must pay a price.

“For these reasons, Pyongyang is not likely to ever give up its nuclear weapons—ever. This fact, above all else, is driving Northeast Asia toward a conflict the world has not seen in decated.

“As for Washington, the Trump administration looks at North Korea’s nuclear weapons as an existential threat, with National Security Advisor H.R. McMaster even going as far as saying that the Kim regime is undeterrable. Only complete nuclear disarmament and the elimination of North Korea’s missile programs will satisfy Washington.

“With such profound disagreements driving the crisis, Washington is getting ready to enhance its ‘maximum pressure” campaign. Vice President Mike Pence recently announced a new round of sanctions which will be unveiled in the coming days that will be “the toughest and most aggressive’.

“Additionally, Washington and Seoul are set to begin their annual joint military exercises involving 230,000 troops—one of the largest such drills on the planet—at the end of April. With North Korea already complaining that such exercises are unacceptable and having already demanded their cancellation, such drills along with additional sanctions could very well see North Korea respond in dramatic fashion.

“When the Olympic flame fades from PyeongChang we should brace ourselves for what could be the most tension filled few months internationally we have seen since the Cuban Missile Crisis.

“The challenge for the Trump administration is to navigate what will be a tense spring that could very well see the resumption of a conflict on the Korean peninsula that never truly ended and has the potential to claim millions of lives. Through a mix of ingenuity and creativity and avoiding the siren song of war, America and its allies can contain and deter North Korea. It won’t be easy or cost free, but it is the best option we have to secure our homeland and our interests.” (“Why North Korea and America could be at war by April.” Fox News 02.20.18)