Volatility Returns
Since Fed Chairman Ben Bernanke’s testimony before Congress on May 22nd concerning tapering its current QE programs, the markets have been rockin’ and rollin’ and trending downwards, yet we keep hearing the pundits say this year’s stock market gains have nothing to do with QEInfinity. Just what turnip truck do they think we all fell off? The 10-Year Treasury note yield has risen from 1.8% to 2.5%, a nearly 80% increase in interest rates. Volatility has increased as well with the percentage of days the S&P trading range exceeds 1% rising substantially.
| Date Range | Percent of days S&P trading range exceeded 1% |
| May 22nd – July 5th | 70% |
| April | 45% |
| March | 25% |
| February | 32% |
| January | 5% |
Bottom Line: The Fed fueled run up in stock prices may have reached an interim peak. We expect increasing market gyrations in the coming quarters, which could provide some attractive entry points.
