Dismay as Fed dove Bullard fails to rescue markets: Dismay as Fed dove Bullard fails to rescue markets: Bullard optimistically is looking for the jobless rate to fall to 4.0-4.5% and noting that the outlook on growth is "relatively good" (in contrast to what the markets are pricing in). He's tracking GDP growth at 2.5-3.0% and is "more sanguine" on China than the markets and says the Fed doesn't react directly to the equity markets (shame), while he's undecided on September. He's reportedly speaking on Sirius XM Channel 111 on Wharton Business Radio. Guess someone else will have to step forward to perform a plunge protection operation on the markets today.
U.S. VIX equity volatility blew out the summer top U.S. VIX equity volatility blew out the summer top gapping out to highs of 24.49 today from a low of 13.73 as recently as Wednesday, before pulling back to 23.0. It would seem some complacency is finally coming out of the stock market, with the S&P 500 1.3% lower on the day and having cracked below the psych 2k level to lows of 1993.2 before resurfacing to 2,009. That took the VIX back to December 2014 levels when the VIX surged into year-end on Greek concerns. As analysts had been warning about the pennant pattern "which can precede a more aggressive breakout", the VIX sliced right through our 20.0 target. On the S&P it looks like investors aren't even waiting for the "death cross" (of 50- and 200-day m.a.s), which appears to be converging near 2,085, even as the index probes 2k.