This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Effects Of Italian Politics On VIX, 3 Stocks To Watch

Ryan Horch, Kapitall  Markets reacted negatively to the uncertainty surrounding Italian elections on Monday. The S&P 500, Dow, and Nasdaq were all down around 1% at the close. The root of this decline came from a senatorial election in the Euro Zone's third largest economy, which showed no party holding a majority.

If parliament remains split, Italy’s ability to maintain its reform policies will be called into question. This could endanger the stability of the Euro as a whole.  The Euro fell against the Dollar following the news to $1.31.

VIX

Another result coming from the non-result in Italy was a 25% increase in the CBOE Volatility Index (VIX). The VIX is commonly known as the "fear index" since it's a measurement of expected volatility for the 30 days to come. The VIX closed around 18, which is still a relatively low value, however if Italian electoral woes continue it is possible that the VIX may continue to rise.

Investing Ideas

Keeping in mind this jump in the VIX, we decided to run a screen for large cap stocks ($10B+), for stability, with high VIX readings in case Italian politics continue to drive the “fear index” up. Stocks with a high VIX typically outperform when volatility and fear spikes. This means that with more uncertainty in the market, these stocks tend to perform well.

Do you think a majority will be elected to parliament in Italy calming any additional uncertainty surrounding the Euro? Or will fractured politics jeopardize the stability of the European economy? If the latter occurs, this list may be a good place to start for investing ideas.  

Use the Turbo Chart to see performance of AAPL, CEO, and CHL over the last year:

 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs