The U.S. markets are right back where they were a month or so ago after nearly making it to a new cycle high. This volatility, and the change in investor sentiment that accompanies it, is unlike anything we have witnessed in years. It is a strange development to see the S&P 500 off a little over three percent from its cycle highs and investor sentiment sitting near cycle lows! Maybe the events of the past few years have scarred investors so badly that being bullish around volatility has become a thing of the past? The likelier culprit in our opinion is the large decline in the number of companies providing guidance in recent years.

Company guidance to investors was always a beacon to focus on in times of volatility. Things like the French elections or problems at Spanish banks did not have to be major events for equities because there was always something to turn to for a view of the future. The world is different today as only a fraction of companies now provide guidance compared to ten years ago. This leaves investors without a beacon and thus much more sensitive to economic data points or newspaper headlines. Ultimately, it makes for a more volatile backdrop. Combine this with a world more vulnerable to external influences (i.e., inflation) and we have a market reality that is very different than the world we operated in a decade ago. The following report explains this phenomenon in greater detail and discusses the likeliest road ahead in coming quarters. Look out for part 2 of this report tomorrow.