Global equities decline as volatility spikes

Thursday, December 12, 2013

US equity markets dropped for a second day amid tapering concerns. The S&P 500 erased 1.13% off its value throughout the day as the index settled just above 1,782 after the largest one day decline since early October. Investors are cautious that the recent string of impressive economic data could prompt the Fed to adjust its bond buying commitment, with the focus firmly on the upcoming FOMC meeting next week. The DJIA closed 0.81% lower, reversing the gains made towards the end of the previous week.

The CBOE volatility index closed above 15 points for the first time since mid-October as investors largely ignored the progress made regarding the budget in the US. Market volatility represented by the VIX spiked to a two month high after gaining over 10% yesterday, the largest one day increase since 15th October.

Most major European equity indices have struggled to hold near the recent record highs as the DAX and CAC drifted lower for the third consecutive session, closing 0.4% and 0.1% lower respectively. London’s blue chip FTSE 100 index managed to test 6,550 again yesterday after a jittery start to the session, however, gains made throughout the day were quickly erased once the US session opened with heightened uncertainty surrounding QE pushing many market participants to the side-lines. Major European indices have opened up on the back foot this morning, carrying over the weaker sentiment from Asian markets.

VIX spikes to highest level in 2 months 

VIX Index Chicago Board Options 2013 12 12 08 02 22



Events for today: Thursday, 12 December 2013

1000

EZ

Oct

Industrial Production

1330

US

Nov

Import & Export Prices

1330

US

Nov

Retail Sales

1330

US

w/e

Jobless Claims

1500

US

Oct

Business Inventories

1530

US

w/e

EIA Nat Gas

LT: 

Nov  Gasoil (ICE)

OE: 

Dec  Brent Crude (ICE)

   View Economic Market Calendar

Topics: SP 500, DAX, FTSE100, CAC
More from: Kash Kamal