(Repeats column initially published late on Friday)
By Angela Moon and Ryan Vlastelica
NEW YORK, June 29 Wall Street may kick off the
second half of the year with an uptick in volatility, thanks to
the June jobs report and plenty of other market-moving data in a
short trading week.
Financial markets will be closed on Friday for Independence
Day. So Thursday will bring a blitz of numbers: the nonfarm
payroll figures for June, the May trade deficit and the June
index on the services sector from the Institute for Supply
Management. On Wednesday, U.S. Federal Reserve Chair Janet
Yellen is scheduled to speak on financial stability at an
International Monetary Fund conference in Washington.
The elevated volatility could shake some traders out of a
stupor. They have been limited in their betting by this market,
which has been resilient but boring: The S&P 500 has not
had a weekly swing of more than 2 percent since mid-April.
"It has been a very frustrating few months in the market for
both long-term and short-term traders. It is very tough to
outperform in this environment," said Sam Ginzburg, head of
trading at First New York Securities in New York.
The S&P 500 has scored 22 record closing highs for the first
half of 2014, feeding concerns about a technical pullback. Yet
the CBOE Volatility Index, Wall Street's fear gauge, has
hovered near multi-year lows, reflecting a market that seemed to
grind higher no matter what was thrown at it.
"Markets will probably trade sideways or lower until the VIX
gets to a higher level, where it can support some kind of (a
meaningful) advance," said Donald Selkin, chief market
strategist at National Securities in New York, which has about
$3 billion in assets under management.
The VIX is trading around 11, or about half of its long-term
average of about 20. While no one would want to relive the
financial crisis when the VIX jumped to 89.53 on Oct. 24, 2008,
a modest amount of volatility is welcome on Wall Street.
A higher VIX creates valuation imbalances that drive stock
picks and boost volume. Trading volume has collapsed from more
than 8 billion shares a day in 2007 to an average of about 5
For long-term investors, though, Wall Street is wrapping up
a good first half of the year. The S&P 500 has climbed 6.1
percent this year, following a jump of 30 percent in 2013.
A recent Reuters poll showed market participants expect the
benchmark S&P 500 to hit 2,000 for the first time before the
year ends. That milestone would mark a gain of about 8.2 percent
If the market closed 2014 at current levels, it would be the
best three-year run for U.S. stocks since the 1997-1999 period.
(Editing by Jan Paschal)