The next potential BIG volatility day comes on Tuesday, May 9, when President Joe Biden is scheduled to meet with Speaker of the House Kevin McCarthy will hold talks on raising the debt ceiling to avert a U.S. default.
I don’t expect a breakthrough of any dimension. The politics say to me that both sides are dug in and that we’re still too far away–weeks perhaps–from the excrement hitting the propellers.
The question for investors and traders is when the financial markets might start taking the prospects of a U.S. default seriously.
Right now, there’s no indication of major fear. If there were it would be reflected in the VIX “Fear Index,” but at 17.41 as of noon on May 8, the CBOE S&P 500 Volatility Index (VIX) is still at a level that says “What me worry?”
I’m looking to see if we get any move up in the VIX tomorrow on a discouraging lack of progress in the debt ceiling talks.
Exactly what whap on the nose do the financial markets need before pricing in this crisis?
