In: Finance
explain the volatility of the 2019 year to now in stocks
In the year 2019,the volatility of the stock market have been comparitively low as the stock market have been on a upward momentum and there have been lack of uncertainty for volatile swings in the market.The relative performance of the volatility can be seen through a flatter vix (volatility index) apart from one or two instances of trade war related worries and uncertainty there wasn't much to cause high volatility swings.
Since the late 2019 with the upsurge of Coronavirus pandemic the uncertainty took the central stage and the volatility was back in action.There have been wild ruthless swings that caused panic in the worldwide market .It was triggered by fears amid COVID 19 concerns.
In February 2020 global stock markets started to give up yearly gains as the concerns were getting worsened.The volatility went up on decades high and continue to hit fresh highs as countries started to announce lockdown,the cases surged and industries were shut down.
There have been a wide speculation of an impending recession and that provided a way for surge in volatility.There has always been an inverse relationship between volatility index and stock market indices.When volatility goes up ,the relative bulishness of stock market comes down and vice versa.
So overall we can say that with the current environment of clouds of uncertainty hovering over stock market the volatility is here to stay till there is no permanent solution to counter this pandemic.