1. S&P 500 hits 18th record closing high this year. 2. VIX fell below 14.5, lowest since December. 3. Goldman Sachs warns of increased equity drawdown risk. 4. Fed easing could increase market volatility. 5. Inequities in valuations may not reflect economic risks.
VIX dropping to lowest levels indicates complacency; historically, low VIX precedes spikes in volatility during downturns. Recent events show increased risk of equity pullbacks which could drive VIX higher.
Given the current market volatility and drawdown risks outlined by Goldman, their analysis directly affects VIX readings and investor sentiment surrounding equity markets.
Current market dynamics suggest heightened volatility could emerge soon, similar to previous late-cycle behaviors leading to rapid VIX increases.