October 30, 2024: Stock Market Stability Belies Bond Market Volatility

As the stock market continues to notch new highs, underlying uncertainty may go unnoticed. While the stock market projects calm, increased volatility is clearly visible in the bond market. You can expect this week’s data releases and next week’s election to give markets a clearer direction.

The MOVE Index—the bond market’s equivalent to the VIX—has hit volatility levels not seen since last year when 10-year Treasury rates approached 5.00%. Notably, the rate of change in the index reflects levels not seen since the collapse of Silicon Valley Bank (SVB) in the spring of 2023. These heightened volatility levels indicate an acceleration of uncertainty during a period of significant economic releases, earnings reports, and election jitters.

The economic indicators this week are all interconnected and will have a substantial impact on markets. We will receive the GDP report, with a primary focus on consumer spending—the largest driver of GDP. The PCE report will indicate the prices consumers paid, while the consumer confidence survey will reveal their willingness to pay those prices in the future. We will also receive JOLTS and payroll figures, which will highlight the strength of a job market that continues to support U.S. consumer spending.

Weekly Market Update: October 30, 2024