Wells Fargo says stock market volatility will balloon after US election
Jim Watson/AFP via Getty Images; Tasos Katopodis/Getty ImagesWells Fargo head of rates strategy Michael Schumacher told CNBC's Trading Nation Tuesday, options are showing greater volatility.
He thinks investors will flock to US Treasuries due to greater volatility, and the US-10 year yield may fall to 0.40% from around 0.68%.The stock market should prepare for ample amounts of volatility post Election Day, Michael Schumacher, head of rates strategy at Wells Fargo, told CNBC's"Normally, you might think that it's Election Day or Election Day plus one that is super volatile," Schumacher said. "But this year, markets are saying 'Hey, wait a minute.
"The big takeaway is three-month options vol is still quite high, and it has not really come down versus the two," Schumacher said, referring to the premium of the November contract over October. "Why is that? Maybe it's a messy result. Maybe the results aren't even clear for a few weeks. Maybe Brexit gets onto the scene, as well," he added.
He said: "It sounds like a really big move. But if you consider it in the context of things that could transpire in the next couple of months, I'd say it's not that big,"
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