Next week, investors will focus on quarterly corporate results from Cisco Systems Inc, General Motors Co and Walt Disney Co as well as data on US consumer prices. — Reuters pic
“The recent retail activity was concerning for the broader market,” said Benjamin Bowler, head of global equity derivatives research at BofA Global Research. The fear gauge’s climb was eight to 10 points greater than the expected move following such a drop in the S&P 500, according to Stuart Kaiser, strategist at UBS. The outsized reaction, he said, points to heightened jitters among investors that could suggest bigger market sell-offs in response to negative developments.
Longer-term, several market analysts say the GameStop effect may be no more than a blip on the radar screen for markets as a whole. Drops in the VIX of 20 per cent or more to below 25 tend to bode well for stocks, with the S&P 500 rising 2.6 per cent a month later, according to Christopher Murphy, co-head of derivatives strategy at Susquehanna Financial Group.