US Stocks On Track For Strong Start With VIX Plunging: Why This Analyst Says Next Move ‘More Likely Higher Than Lower’

After stocks scraped through on Wednesday, the market mood has lifted from a general increase in risk appetite. With volatility plunging, all risky bets, such as equities and cryptocurrencies, are rising higher. Crude oil prices rose solidly, and the bond yields moved lower as traders continued to discount an accommodating monetary policy environment based on the recent spate of soft data.

The revised third-quarter GDP report and a Fed speech scheduled for the day could also offer some cues for trading.

Cues From Tuesday’s Trading:

U.S. stocks ended Tuesday’s lackluster session on a modestly positive note, thanks to a pullback in bond yields amid the release of soft data. The major averages opened slightly lower but cut their losses over the morning session and rose to their highs by early afternoon trading.

Although the Dow Industrials stayed above the unchanged line through the remainder of the session, it closed well off the highs of the session. The 30-stock blue-chip average settled at the highest level since August 4.

The Nasdaq Composite and the S&P 500 indices gave back their gains in the afternoon and flitted in and out of the unchanged line before closing modestly higher.

Among the economic reports, the results of two separate house price surveys showed a slight slowdown in house price growth in September. Conference Board’s consumer confidence index rose in November, although a downward revision to the previous month’s reading took some sheen off the reading.

LPL Financial Chief Economist Jeffery Roach sees a silver lining in the cloud. The economist said that much of how consumer spending will pan out depends on the job market. “As the labor market cools, investors should expect consumer spending to slow down,” he said.

Roach also pencils in a weaker job report for November and sees the Fed keeping unchanged at current levels at the December rate-setting meeting.

US Index Performance On Tuesday

Analyst Color:

Commenting on the market movement, fund manager Louis Navellier said stocks were treading water with the CBOE Volatility Index, or VIX, near…