The most confident investors have been in two decades...
Wall Street is as placid and relaxed a place as it has been in decades, according to the closely-watched CBOE Volatility Index (VIX).
The measurement dropped this week to an notable low of 9.8, representing a level of calm not seen since December 1993, the same month US President Bill Clinton signed NAFTA into law.
As CNN Money points out, the "fear gauge" has recorded a single-digit VIX reading on less than 0.2% on trading days since 1990.
The S&P and Nasdaq closed at a record highs following Emmanuel Macron's victory in the French presidential election on Monday.
Nicholas Colas, chief market strategist at brokerage firm ConvergEx, recently wrote to clients:
"There is an overwhelming market narrative that equates to 'don't worry, be happy'. You don’t end up with a 10 handle VIX very often, and when you do it is the result of a unique set of circumstances.
"Historically, [the single-digit reading] signals the possibility of a pause in equity returns. This means at least a few of our 10 “Puts” will not actually work as anticipated. But the real question is not 2017 – it is 2018. Will next year resemble 1995 (+37%) or 2008 (-37%). Again, that comes down to how many of these 'Puts' survive the next 12 months."
The financial crisis of 2008 saw the VIX spike above 81 as markets crashed, whilst it hit 41 as recently as August 2015, when the Dow Jones briefly fell over 1,000 points in a single day.
Voicing a note of concern, former Federal Reserve governor Kevin Walsh said at the Sohn Investment Conference on Monday:
"There are plenty of risks in the world and I for one see risks highest when measures of risk are now as low as they are across financial markets."
"I would not look at a VIX of 9.5 or 10 and take comfort," he added. "I would take fear."