Trump dump

5 February 2018 By Tom Buerkle Follow @tombuerkle

Indexes fell over 4 pct on Monday and share-price volatility surged to a seven-year high. Companies remain very profitable and higher bond yields should be no surprise. But a breather – at a minimum – was overdue after a record run. It’s also a reminder of shifting fundamentals.

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U.S. stock prices fell sharply on Feb. 5. The S&P 500 Index closed down 4.1 percent at 2,649. The Dow Jones Industrial Average closed lower by 4.6 percent, over 1,000 points, at 24,346 after having been down nearly 1,600 points at the afternoon lows.

CBOE’s VIX index, which measures the implied volatility of options on the S&P 500, traded as high as 38.80 – a level not sustained since 2011 – before easing to close at 37.32, more than double its level on Feb. 2. The yield on the U.S. Treasury’s benchmark 10-year note, which touched a four-year high of 2.88 percent in early trading, dropped to around 2.7 percent in later trading, down from 2.84 percent on Feb. 2.

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