Market participants aren't expecting the turbulence to die down
any time soon.
By April Joyner
NEW YORK (Reuters)
- Investors are bracing for an extended period of market volatility as worries
over a potential resurgence in coronavirus
cases and political uncertainty roil stocks.
The Cboe Volatility Index, known as "Wall Street's fear gauge," hit its
highest level in nearly two weeks as concerns over waning fiscal stimulus and
the long-term economic consequences of the coronavirus pandemic took the
S&P 500 down to a seven-week low on Monday. [.N]
Market
participants aren't expecting the turbulence to die down any time soon.
VIX futures show
that investors
are betting that market swings will persist beyond the Nov. 3 U.S. presidential
election and into December, reflecting worries about the possibility of a
contested election and concerns that a deeply divided government will fail to
agree on providing more fiscal stimulus to support the U.S. economy.
Other possible
stumbling blocks for U.S. stocks include re-escalating tensions between the
United States and China, as well as a potential increase of global coronavirus
cases that could once again lead to broad economic shutdowns.
The ramped up
concerns are a sharp departure from the summer months, when signs of healing in
the U.S. economy and expectations of more fiscal stimulus took markets to record
highs after their brutal March sell-off.
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