In a recent event one of the spokesperson of Goldman Sachs warned investors that during the month of October markets will suffer due to great fluctuations. Though Wall Street is about to reclaim record high contrary to this, analysts have made speculation that stock volatility would be 25% higher during the month of October since the year 1928.
Great swings have been registered on several stock benchmarks and on sector since the past 3 decades, this made health care and technology as highly volatile groups. During a press meet, John Marshall stated that high volatility during the month of October might be nothing more than a co-incidence. He also stated that the present moment is critical for those companies and investors who manage performance as per calendar year-end.
A volatility index which measures American stocks is at a balance during the present month since trade war between US and China has eased a bit and there has been a re-storage of Treasury yields. Analysts also warned that the stock market might get chaotic all over again since the season of earning has ended. This should have exacerbated a change in the sentiment of investors.
Marshall also stated that pressure like these boost volatility and volume since earning reports and analyst days were observed by investors. Strategists also noted that even in volatility of single stock, the seasonality is strong. This happens because earning as well as several other events leads towards bigger moves.
During a brief talk Marshall said that day moves of earning is on a rise in comparison to average move on a daily basis, but the month of October is considered as quarter and has moves for absolute earnings for the American stocks.
Back in August, VIX acquired the highest level and with increase in trade war it also fanned fears regarding recession. The industrial average of Dow Jones suffered highly on August 14, at that time biggest signal regarding recession was flashed by bond markets.