Trump 2.0: The First 100 Days | United States

Volatility Rises… VIX Index

Impact on CRE

• The VIX Index is the implied volatility within the S&P 500 options market.

60.0

• Currently the VIX is at 28.5 as of April 23, up 89% from inauguration day. It peaked 250% above its inauguration day level on April 8. This current level is 46% higher than the long-term average (1990-present). • Volatility comes and goes quickly with bouts of uncertainty — such as August 2024 when a very weak payroll report drove higher uncertainty about the health of the economy. • The 25-year correlation between the VIX and CRE investment sales is -0.33, and the correlation with overall CRE prices (as measured by the RCA All-Property CPPI index) is -0.24. The negative implies that when volatility goes up, sales and pricing goes down (and vice versa when volatility goes down). • Every one bps increase in the VIX, if sustained, is associated with a 1.0% drop in property prices 3-6 months later. • Higher uncertainty is associated with lower investment and economic growth.

50.0

Weak Aug 2024 Job Report

40.0

30.0

20.0

10.0

0.0

Source: S&P Dow Jones Indices LLC

CONTENTS

CONTENTS

Cushman & Wakefield