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“He who waits to do a great deal of good at once will never do anything.” – Samuel Johnson
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
Investors apparently slept on the Fed’s announcement yesterday and woke up in a good mood. The S&P 500 is on pace to open up by 0.75% this morning, while the Nasdaq is on track to open up by more than 1%, and small caps are leading the way with a gain of 1.25%. The US strength follows what was a mostly positive night in Asia, where China was the only country to trade lower, while Japan and Korea both shot higher by over 1%. The strength in Japan came even as Machinery Orders fell 4.6% m/m compared to forecasts for a drop of just 1.8%. In Europe, stocks are also higher across the board as the STOXX 600 rallies 0.8%.
This morning in the US, there’s little in the way of earnings data, and the only reports on the economic calendar are jobless claims at 8:30 and the Philly Fed and Leading Indicators at 10 AM.
Like the quote above, the market’s grind higher for the last several months has been more gradual than a move concentrated into a handful of days. There are several ways to illustrate this, and we’ll start with the VIX. At 14.8 this morning, the VIX is on pace for its lowest close since late August, not exactly a level you would expect for what historically has been one of the most volatile months of the year. As shown in the chart below, if the VIX was an EKG, we’d be putting a sheet over the patient as it has flatlined since first falling back below its 200-DMA in June.
In addition to the low VIX, another example of the gradual moves is by looking at the S&P 500’s average opening gap. Using SPY as a proxy, the S&P 500’s average change at the open relative to the prior days’ close over the last 50 trading days has been 0.25%, and there has only been one day when the S&P 500 gapped up or down more than 1% (9/2/25: -1.17%). After volatility at the open rocketed to the highest levels since COVID back in April, the average daily change has sunk like a stone to some of the lowest levels of the last five years.
Just as volatility has been subdued at the opening bell, it has also been tamed during regular trading hours. Just like the average opening gap, intraday volatility shot higher in April only to come crashing down in the summer to around the lowest levels of the last five years. The old cliché says to never short a dull market, and that’s the only piece of advice an investor has needed over the last few months.
