Volatility to Last
December 6, 2021
The CBOE Volatility Index (VIX) closed above it’s 50, 100 and 200-day moving averages every day last week. Increased volatility commands a higher equity risk premia/lower acceptable multiples. Volatility usually acts like a pendulum and it takes time to slow down. Also note that equity volatility (VIX) and bond market volatility (MOVE Index) seem to be converging/resetting higher at the moment leading to significant performance dispersion in favor of low beta defensive sectors.