Week of August 5: Market Snapshot
The first week of August saw mixed performance across asset classes and ended with a two-day selloff in the equity markets. Multiple data points suggest a softening labor market (nonfarm payrolls well below expectations, increasing unemployment rate triggered two recession indicators, above expectation initial jobless claims, and above expectation number of job openings) and a downward revision to GDP growth helped contribute to the downside volatility.
Resulting from the increased uncertainty, we saw the VIX Index hit a one-year high breaking above 29 on Friday. While not guaranteed to repeat, historically large VIX spikes have signaled a near-term market bottom in stocks.