This week has served as an interesting example of the market pricing-in data and events ahead of time. If, over the last few weeks, you had invested in stocks based solely on headlines your nerves probably kicked up a bit. Various pundits were predicting a rate raise coming out of the June Federal Reserve meeting even though the Fed funds futures market was telling us there was essentially zero chance of a hike. Similarly, we were seeing headline predictions of the stand-off between Greece and the European Union becoming more contentious and to some unknown extent contagious to stocks here in the U.S.. However, the market was suggesting something entirely different.
The VIX had perked up slightly in recent weeks but it stayed at more than manageable levels in front of this news. Additionally the indexes, while they've gone back and forth, continue to stay in the range we've been watching for months. It seems clear that the market is telling us, at least in the short term, is that it needs a greater catalyst in order to make a sustained move in either direction. Everything priced-in right now suggests we're in a boring market for the time being.
