The Wall Street measure of fear or implied volatility in the equity market reflected a more complacent market after U.S. midterm elections passed without any significant surprises for investors. Many observers anticipated a split congress, with Democrats gaining a majority in the House of Representatives and Republicans widening their lead in the Senate.
The lowered risk outlook as reflect in the VIX indicated investors more or less welcomed the election results or at least highly anticipated the results.
“Democrats take the House, Republicans keep the Senate. The only surprise is the lack of one for investors conditioned to expect it after Brexit and 2016,” Morgan Stanley analysts in a research note on Wednesday morning, the Financial Times reports.
For more information on the CBOE Volatility Index, visit our VIX category.