The final trading week of 2022 saw stock markets finish the year with a slight downturn, with the S&P 500 falling by -0.14% and the STOXX index by -0.61%. The VIX rose 0.80 points to 21.67, while the VSTOXX rose 0.85 points to 20.89. The Nikkei index fell by -0.54%, and the Nikkei Volatility Index fell by -0.28 points to 19.92.
Robust economic data released at the end of the year pointed to a strong labor market and faster economic growth than previously thought, however the focus remains on how the Chinese reopening will affect the markets in the new year. Money managers are preparing for a moderating stock market in the coming months, and are keeping a close watch on global rates.
As I wrote before you cannot use 1std / 68% normal distribution for short-horizon market move predictions. Here is a far more accurate 50% range forecasts for the week ahead - that is the index will end the week within the range with 50% probability, and 50% outside of the range. This is more intuitive than 68% , but the main thing is that it is not based on normal distribution which is highly inaccurate for weekly returns.
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