Stock Market Volatility and Market Sentiment

Stocks experience late-week comeback after volatile sessions, displaying signs of exhaustion following a torrid rally. Market reacts to Fed rate cuts and Bank of Japan's actions, with tech sector leading the charge. Fear gauge subsides after reaching unprecedented levels. Former Treasury Secretary urges investigation into VIX surge. Stock-bond ratio signals potential market sentiment and future returns.

Stock Market Volatility

The extreme volatility event in the stock market may not have been as it seemed, with some experts questioning the accuracy of the VIX fear gauge. Technical factors such as lack of liquidity and misfired volatility bets could have contributed to the spike. Market sentiment may be better reflected by VIX futures rather than the VIX itself.

Stock Market Optimism

Wall Street is overwhelmingly optimistic about the economy, with most equities strategists bullish on the stock market despite warnings of excessive valuation and complacency. The key concern is around earnings meeting high expectations, which could trigger a market downturn.