While still under the shadows of the Syrian strike, the market has a new story to follow and that is the deployment of a nuclear-powered aircraft carrier to waters surrounding the Korean Peninsula. The markedly unusual move had been explained as a reaction towards North Korea’s provocations and have fuelled concerns that further tensions may emerge. Certainly with the hardening of the stance by the new US leader, the concern could very much be justified.
For the markets, the reaction had been apparent. The most notable change was a pick up in the fear gauge, the CBOE volatility index or VIX, spelling a 9.2% spike. The index rose to the highest level since early December 2016, ending Monday’s session at 14.05.
Wall Street meanwhile saw near-neutral changes in the day despite the choppiness. While technical indicators suggest that prices continue to look for a breakout from the current symmetrical triangle setup, the underlying driver may be the anticipation of corporate earnings ahead, keeping changes almost to a standstill.