) was the main laggard Tuesday. The stock fell nearly 4% after missing revenue forecasts
. The social media giant also continues to suffer from negative headlines following the release of “The Facebook Papers.”
But investors are so giddy that they might be almost bordering on complacency.
The VIX (VIX
), a measure of volatility that is often referred to as Wall Street’s fear gauge, plummeted more than 30% in October so far and is near a 52-week low.
The CNN Business Fear & Greed Index
, which looks at the VIX and six other measures of investor sentiment, is now trading near Extreme Greed territory. Just a month ago, the index was not far from Extreme Fear levels.
So what’s changed in the past month?
Corporate America has impressed Wall Street with third-quarter earnings, and perhaps more importantly, in its guidance for the fourth quarter and 2022.
), GE (GE
) and 3M (MMM
) are among the blue chips that all reported solid results Tuesday. And according to figures from John Butters, senior earnings analyst at FactSet, 84% of the S&P 500 companies that reported earnings through the end of last week topped analysts’ forecasts.
It’s adding to the growing sense that the global supply chain problems will turn out to be hiccups that won’t derail the economic and profit recovery that’s taking place globally as more people get vaccinated for Covid-19.
Toy maker Hasbro (HAS
), for example, is one of several big companies
that has recently expressed optimism about an eventual end of logistics woes
in the near
Investors also seem to have grown more sanguine about the inflation outlook. It’s now considered a certainty that the Federal Reserve will formally announce plans to begin to taper, or cut back on, bond purchases starting next month — a sign that the Fed is confident the economy is returning to normal.
The Fed has already telegraphed its taper timeline, signaling in the minutes from its last meeting in September that it will likely complete the process by the middle of next year and possibly raise rates later in 2022.
For now, though, Wall Street appears to be confident that the Fed has inflation under control and is taking only take small, incremental steps to fight it and keep the economic recovery on track.