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Coronavirus Impact Stirs Record Volatility

As communities and business around the globe undergo significant transitions in an effort to contain the COVID-19 virus, the economic fallout of the pandemic has raised volatility to record levels.

On Sunday, the Federal Reserve announced an interest rate cut to near zero in an attempt to stabilize markets, but nevertheless Monday’s volatility shot sky high. The CBOE’s volatility index (VIX) is at levels not seen since 2008 as US markets stagger at 3-year lows.

Market Snapshot

Markets searched for direction Tuesday morning, swinging from positive to negative territory and back several times. Here’s a look at Micro E-mini US index futures:

Oil Market

Crude oil has also been shaken with demand forecasts falling based on government lockdowns while an oversupply of oil continues to grow. Both Saudi Arabia and Russia have pledged to increase production which will only exacerbate current supply & demand concerns.

Pictured above is the VIX index since 2008. Current volatility rivals 2008 levels as markets have reached a fever pitch.

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