Volatility is easing even as Wall Street braces for a major stretch, with the Federal Reserve’s rate decision and earnings from Microsoft and Alphabet coming tomorrow and Visa reporting after today’s close. FINTECH.TV correspondent Mark Payton joins Remy Blaire live from the Cboe trading floor in Chicago to break down what the options and prediction markets are signaling.
Payton says the VIX is trading in the mid-17s and down on the day, but notes that, according to Cboe’s latest analysis, S&P 500 options are pricing in a move of roughly 1.3% around the Fed meeting. He explains that the figure does not predict which direction stocks will go, but reflects how much movement the options market expects, showing there is still plenty of uncertainty heading into what could be a big couple of days.
Ahead of Visa’s fiscal fourth-quarter results, and following a miss from American Express’s payments network last week, Payton says Polymarket traders are pricing in about an 80% chance that Visa beats quarterly earnings expectations. The leading prediction for payment volume growth is between 9.5% and 10.5%, with about a 51% probability, while traders favor cross-border growth between 13.5% and 14.5%, with about a 54% probability. He says Visa’s results could offer a clearer picture of how consumers are holding up in the US and around the world.