Financial Index and Stock Project

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Chicago Board Options Exchange Volatility Index, or commonly referred as VIX

measures the anticipated volatileness of the US stock market. VIX bases on the option values of

the S&P 500 Index, and is meant to highlight investors’ perception of the future of US stock

market volatility (CBOE Global Markets, n.d.). Investors utilize VIX to gauge market risks and

distress prior to making investment decisions. VIX is owned by the CBOE Global Markets Inc.

The graph above indicates CBOE VIX from Jan 1 st 2020 to July 2022 (Yahoo

Finance, 2020). At the beginning of the 2020, the index was trading lowly until when the

pandemic struck and installed fear among investors, hence pushing stock prices down. The

downward trend for stock prices, propelled VIX rise as more investors choose to invest in

the option market (CBOE Global Markets, n.d.). The VIX index fluctuated during that year,

rising and falling at given periods. At the start of 2021 when global trade started opening

up, the index experienced sharp decline as more investors opted to invest in the stock

market (Yahoo, 2022). In 2022 towards the end of February, the VIX index rose propelled
by fears of economic fallout due to sanctions imposed on Russia due to its invasion of

Ukraine (CBOE Global Markets, n.d.). In April the index experienced its most significant

drop for the year as more investors started adopting to the economic fears caused by the

Russia-Ukraine war as well as lockdowns as Central banks actions of increasing interest

rates to curb the looming global inflations (Stubbington et al., 2022). As of July, the index

was experiencing marginal drop arising from increased interest rates by the American

central bank to curb inflationary pressure and avert a recession.

DAL stock chart

to July 2022. Towards end of March 2020, the stock price plummeted as countries around

the world started enforcing lockdowns to curb the spread of the covid-19 virus. Travels were

restricted in most countries, with some completely banning entry of passenger planes into

their country. Such proved detrimental to most airline companies such DAL as with low

traffic, profit forecast dropped as more investors choose to stay away. The stock briefly

picked up in June 2020 as the US government announced incentives to help big companies

stay up, hence enhancing investor confidence (Bouwer et al., 2022). Towards end of 2020,

when the vaccines started being administered, hopes for lifting of travel restrictions picked

up, hence pushing DAL’s stock up as they saw the company beginning travel domestically

and internationally. Such positive trend continued into 2021 as more countries lifted travel

restrictions and more vaccines were being administered.

In 2022 March, the company’s stocks dropped significantly due to Russian invasion

of Ukraine, as travel bans and other sanctions were imposed upon Russia. Hence making

Western airlines cancel travels to the country. Such impacted the company’s stock (Bouwer

et al., 2022). Other factors included fears of inflation on the American economy as well as

globally. As of July 2022, the company’s stock was fluctuating due to fear of an impending

recession and the push to raise interest rates by the Treasury to curb inflation.
 References

Bouwer, J., Krishnan, V., Saxon, S., & Tufft, C. (2022, April 1). Taking stock of the pandemic's

impact on Global Aviation. McKinsey & Company. Retrieved July 30, 2022, from

https://www.mckinsey.com/industries/travel-logistics-and-infrastructure/our-insights/

taking-stock-of-the-pandemics-impact-on-global-aviation#:~:text=While%20the%20full

%20data%20from,what%20they%20were%20in%202019.

Cboe Global Markets. (n.d.). Retrieved July 30, 2022, from

https://www.cboe.com/insights/posts/inside-volatility-trading-more-chaos-ahead-or-a-

bottom-what-does-the-vix-index-say/

Stubbington, T., Wigglesworth, R., & Stafford, P. (2022, March 30). War in Ukraine: What

explains the calm in global stock markets? Financial Times. Retrieved July 30, 2022, from

https://www.ft.com/content/4c4c4c04-151c-467c-b011-136d56546da9

Yahoo! (2022, July 30). Cboe volatility index (^VIX) charts, Data & News. Yahoo! Finance.

Retrieved July 30, 2022, from https://finance.yahoo.com/quote/^VIX/chart?p=%5EVIX

Yahoo! (n.d.). Dal Interactive Stock Chart | Delta Air Lines, inc.. stock. Yahoo! Finance.

Retrieved July 30, 2022, from https://finance.yahoo.com/chart/DAL?

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