S&P futures are little changed as the Fed begins its two-day FOMC meeting pushing the VIX below 10, down 1.3% and falling for the 7th day; European shares are lower as is the dollar while Japanese stocks soar on the back of a tumbling yen as a snap election in Japan now appears imminent. Despite the cautious action ahead of the Fed, the The MSCI All-Country World Index rose 0.1% to a new record high.
“Volatility is an instrument of truth," proclaims Artemis Capital's Chris Cole in a wide-ranging interview with The New York Times, warning that "the more you deny the truth, the more the truth will find you through volatility."
While asset-gatheres and commission-takers are celebrating the record highs in stocks - after the world did not end last weekend - UBS Technical Analyst team is a little less sanguine, fearing that this move to new record highs in the S&P could well be another false breakout due to a lack of sentiment signals in derivatives-land, and breadth breaking down.
Buy Gold As Washington "Stumbles" Advise Blackrock
For all the recent concerns about an "imminent" nuclear war with North Korea (not happening, according to the head of the CIA), which prompted a stunned reaction from Morgan Stanley which earlier today observed the "70% rise in the VIX index over three days, 2% drop in global equities, and more than a few holidays disrupted", leading it to conclude "Well, That Escalated Quickly", the market continues to ignore the real risk: the upcoming central bank balance sheet taper which will have a dire and drastic impact on markets according to Citi's global head of credit product strategy, Matt King