Market fear is back in a big way

That was exactly as wild as it seemed.The VIX volatility index, which tracks short-term market turbulence, jum...

Posted: Feb 6, 2018 10:51 AM
Updated: Feb 6, 2018 10:51 AM

That was exactly as wild as it seemed.

The VIX volatility index, which tracks short-term market turbulence, jumped 116% on Monday -- the highest daily percentage recorded. The index has data going back to 1990.

It's the biggest move since February 2007, when the index rose 64%.

"That shows how much fear has jumped back into the market in a very short period of time," said Nicholas Colas, co-founder of DataTrek Research.

Monday was the worst day for markets in recent memory.

The Dow plunged almost 1,600 points before recovering slightly. It closed down 1,175 points, the worst single-day point decline in Dow history. Its 4.6% fall was the biggest percentage decline since August 2011, during the European debt crisis.

Related: CNNMoney Fear & Greed index is in Extreme Fear

The VIX reflected that turmoil.

The index, which hit 37.32, is now the highest it's been since August 24, 2015, the last time the Dow plunged 1,000 points in a day.

A big reason for the sudden surge in volatility is that stocks have been calm for months, which has kept the VIX tamped down.

The index touched an all-time intraday low of 8.56 on November 24, 2017, and was as low as 8.56 again on January 4. That relative tranquility made Monday's leap feel particularly severe.

If investors had been expecting that to change, the VIX would have been moving higher before Monday.

"If anything, we should have been surprised by how low volatility was to begin with," said Andres Garcia-Amaya, CEO of wealth management firm Zoe Financial.

After months of calm for stocks, investors could now experience some rockiness in the coming weeks.

Related: Stocks plunged. That doesn't mean the economy is in trouble

One group of investors likely to be hit hard are those who have been betting against volatility.

Market watchers are pointing to an exchange-traded security called the XIV, which is structured to go up when the VIX falls.

The XIV is down more than 82% after hours. That means investors who thought the market would continue its bull run without a sell-off could get hit.

But most people shouldn't panic, analysts say.

The market's economic underpinnings remain strong. Corporate earnings are still expected to be bolstered by tax reform, and job creation remains steady.

"If you're a day trader, this is a huge deal. If you're an investor in the long term, this becomes a blip," Garcia-Amaya said.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 159036

Reported Deaths: 3879
CountyCasesDeaths
DeSoto10563104
Hinds10414204
Harrison7397113
Jackson6655128
Rankin6057107
Lee540396
Madison5120107
Forrest394786
Jones376188
Lauderdale3663147
Lafayette341053
Washington3321108
Lamar301950
Oktibbeha255262
Lowndes252867
Bolivar248084
Panola237353
Neshoba2280122
Marshall225051
Leflore211191
Monroe209778
Pontotoc208131
Lincoln200566
Sunflower194155
Warren183058
Tate180451
Union172926
Copiah170840
Pike166760
Scott161330
Yazoo161340
Itawamba159936
Alcorn159328
Pearl River158969
Coahoma155943
Prentiss154931
Simpson154053
Adams147252
Grenada145445
Leake141844
Holmes134461
Covington130040
Tippah130030
George129525
Winston128726
Hancock127641
Wayne123024
Attala122834
Marion121447
Tishomingo114043
Chickasaw110732
Newton110529
Tallahatchie99427
Clay96127
Clarke94853
Jasper87023
Stone82015
Calhoun79513
Walthall79330
Montgomery78426
Carroll75515
Lawrence74614
Smith74216
Yalobusha74228
Noxubee73317
Perry68726
Tunica63019
Greene62422
Jefferson Davis59617
Claiborne59216
Amite57615
Humphreys55219
Quitman5107
Benton50418
Kemper48018
Webster47714
Wilkinson40722
Jefferson38312
Choctaw3637
Franklin3635
Sharkey32917
Issaquena1214
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Alabama Coronavirus Cases

Cases: 256828

Reported Deaths: 3711
CountyCasesDeaths
Jefferson34214511
Mobile20299366
Madison13925150
Tuscaloosa13591156
Montgomery12659238
Shelby1095877
Baldwin9163137
Lee792566
Morgan710851
Etowah677467
Calhoun6695121
Marshall665757
Houston548239
DeKalb504738
Cullman472043
St. Clair451857
Limestone447546
Lauderdale436054
Elmore427564
Walker3818111
Talladega374457
Jackson350723
Colbert336443
Blount310043
Autauga287342
Franklin259734
Coffee254115
Dale242054
Dallas232932
Chilton230841
Russell22813
Covington227934
Escambia206131
Tallapoosa189191
Chambers185950
Pike162214
Clarke161819
Marion146136
Winston141924
Lawrence135336
Pickens127720
Geneva12638
Marengo125224
Bibb123938
Barbour120629
Butler118842
Randolph105922
Cherokee105524
Hale99732
Fayette96316
Clay93525
Washington93319
Henry8946
Monroe83811
Lowndes82129
Cleburne79914
Macon76522
Crenshaw72930
Conecuh72414
Lamar7138
Bullock70919
Perry6927
Wilcox64918
Sumter58922
Greene44218
Choctaw43519
Coosa3724
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