Many traders are aware of the VIX, or volatility index, that measures how a lot traders count on to see the S&P 500 index fluctuate.
However far fewer know even somewhat a couple of measure of volatility in financial development referred to as the Financial VIX Index, created by Jim Paulsen, chief investment strategist at investment-management and analysis agency Leuthold Group. The Financial VIX is essential now as a result of its historical past over the many years since World Conflict II reveals that shares do greatest when financial volatility within the U.S. is at its lowest or its highest—and the pandemic is stoking financial volatility that Mr. Paulsen believes will probably be historic.
“Over the following 4 quarters we’ll have a stage of financial volatility by no means earlier than seen within the postwar interval,” Mr. Paulsen says. “It would blow away the volatility” of the 2007-09 recession, when the Financial VIX shot as much as its earlier postwar peak.
Progress in U.S. gross home product is anticipated to hit an annualized price of 15.2% within the present calendar quarter, then drop to six.8% within the fourth quarter and 5.8% in first quarter of subsequent yr, in accordance with the outcomes of the WSJ Financial Forecasting Survey—the type of massive swing that pushes the Financial VIX larger.