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BigNumber_Image 11.12.24

With election results finalized, investors take a breath.

The election is over—and financial markets are breathing a huge sigh of relief.

Case in point: Investors are much less nervous than before election night. Expected market volatility—as measured by the CBOE S&P 500 9-day Volatility Index—has plummeted 50%, from 26.1 in late October to just 13.1 on November 8 (see the chart).

Stock Market Volatility is Way Down, Post-Election

 
Source: Bloomberg, calculations by Horizon Investments, data as of 11/08/2024.

We believe the significant drop has less to do with which candidate won than with a quick outcome to the race. Wall Street hates uncertainty, so having a clear result that didn’t take days to determine helped ease investors’ jittery nerves.

The decrease in expected market volatility could set the stage for positive stock performance for the rest of the year. Many questions remain about the potential impact of President-elect Trump’s proposed policies, but for now, with the election outcome resolved, we expect to see a relatively calm market environment that could help push stock prices higher.

The CBOE S&P 500 9-Day Volatility Index (VIX9D) estimates the expected 9-day volatility of S&P 500 stock returns. References to indices, or other measures of relative market performance over a specified period of time are provided for informational purposes only. Reference to an index does not imply that any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. It is not possible to invest directly in an index. Information obtained from third-party sources is believed to be reliable but has not been vetted by the firm or its personnel.
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