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Stock Fear Gauge Defies Bond Turmoil. Here Are Four Reasons Why

  • Positive earnings, inflows supporting equities: Susquehanna
  • Stock volatility is lowest versus bond gauge since early 2020
Investors may be getting more comfortable with a Federal Reserve tapering of asset purchases.

Investors may be getting more comfortable with a Federal Reserve tapering of asset purchases.

Photographer: Stefani Reynolds/Bloomberg

The global pandemic is still raging, U.S. policy makers are about to cut stimulus, energy prices are surging and bonds are being sold off. And yet, Wall Street’s fear gauge is near an 18-month low.

The Cboe volatility index or VIX, which measures expected fluctuations in the S&P 500 Index, has been on a downtrend for the past month and dropped to 15.7 on Tuesday, near the lowest since February last year. The gauge is now well below its lifetime average of about 19.5, according to data compiled by Bloomberg stating in 1990.