chiangmai
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Post by chiangmai on Aug 16, 2020 5:48:45 GMT 7
If Trump wins, markets will soar, if Biden wins they will fall...at least that's the popular belief currently.
A better indication perhaps is that every time my pension investment breaks a certain threshold markets fall and it just broke that threshold again, for the fourth time!
AND, the S&P is approaching a record high....the tea leaves suggest getting out, what do you think?
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AyG
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Post by AyG on Aug 16, 2020 6:46:14 GMT 7
If Trump wins, markets will soar, if Biden wins they will fall...at least that's the popular belief currently. Are you sure about that? What markets like is certainty. Whilst there is uncertainty about whether Trump will be able to steal the election, markets are held back. Whoever wins will provide certainty and should give the markets a boost. The worst scenario would be a prolonged period of wrangling after an inconclusive or blatantly fraudulent result. The fear mongering about Biden's winning comes from a right wing disinformation campaign. Business isn't going to suffer if the very wealthiest individuals have to pay a modest wealth tax. In fact, you could tax them at 50% and it wouldn't change a thing - they would still have more money than they know what to do with. And on the other side, investment in fixing America's crumbling infrastructure can only be for good. Plus international relations and trade would dramatically improve with Trump out of the picture (and preferably behind bars). |
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chiangmai
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Post by chiangmai on Aug 16, 2020 7:08:48 GMT 7
This is a bit like the tree falling in the forest when there's nobody around to hear the noise of it fall.....we will only ever know one result and one outcome, we can only hypothesize about what the alternate might have been hence markets might well have performed in the same way, regardless of the winner.
I hear what you say about certainty and I agree...to an extent. That "certainty" currently is that Biden should win because of his large lead in the polls, but as Obama said last night, don't underestimate Joe's ability to fuch things up!
I suppose any large scale market movements will be predicated on stimulus measures resulting from covid19, in theory they should be very similar albeit the US/China trade wars would likely end under Biden and that would be market positive.
So to answer your question, no I'm not sure, in fact I've just decided that a Biden win would be good for markets!
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Post by Skywalker69 on Aug 16, 2020 12:49:10 GMT 7
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chiangmai
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Post by chiangmai on Aug 16, 2020 14:58:14 GMT 7
I got as far as the second para before the article failed its first fact check so I didn't read further: "stock market volatility continues to sit at ten–year (pre–crisis) lows". www.cboe.com/vix |
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AyG
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Post by AyG on Aug 16, 2020 16:36:33 GMT 7
I got as far as the second para before the article failed its first fact check so I didn't read further: "stock market volatility continues to sit at ten–year (pre–crisis) lows". www.cboe.com/vix(1) Did you check when the article was written? It appears to have been in early March this year. (There's no date on the article itself that I could see.) I have no idea whether volatility was low then or not. (However, when someone writes "stock market volatility" I assume they're an American idiot. They are ignoring the fact that there are other markets across the world with their own volatilities which don't move in lockstep with the US.) (2) Vix is not a measure of volatility, but a measure of forecast volatility, which is something quite different. (3) The author is, to put it mildly, partisan, given sentences such as "[as] Russia became more of a free-market economy, the United States has started to look more like the centrally-planned economy of the former Soviet Union." That just makes me think "idiot". |
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chiangmai
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Post by chiangmai on Aug 17, 2020 5:11:33 GMT 7
It would be interesting to understand the difference between forecast volatility using the VIX and actual volatility, using futures as the gauge rather than actual price measurements, do you know what that relationship is? I imagine it must be fairly reliable otherwise it wouldn't be so heavily used.
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AyG
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Post by AyG on Aug 17, 2020 19:32:57 GMT 7
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chiangmai
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Post by chiangmai on Aug 18, 2020 5:11:43 GMT 7
Many thanks for providing the links. I think I would have expected the VIX to trail actual volatility and indeed it appears to do so fairly consistently. I think therefore it remains a useful indicator of sentiment although the degree of which needs to be muted somewhat. |
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