The large moves Morgan Stanley is tracking are so-called “3-sigma” events, which is a statistical way of calculating data that is within three standard deviations of a mean.
2018 is on track to have more than 25 such moves in financial markets, the most since 2008 when there were nearly 35, according to the firm.
“Surprises (large moves relative to expectations) are becoming more common across asset classes,” wrote strategist Andrew Sheets.
Sheets and team believe that “tightening monetary policy and geopolitical risks” may be helping boost this year’s uptick in volatility.
And the remainder of the year is set to be even wilder because of the U.S. midterm elections, CFRA analysts said in a note Monday.
“Since [World War II] the S&P 500’s average daily price volatility was highest during midterm election years, in general, and third-quarters of [those years], in particular,” the note said.
CFRA found, when breaking down the four years of the election cycle, that midterm election years had an average daily volatility of 116 percent. Those years are 10 percent above pre-election years, which have an average daily volatility of 106 percent, and markedly above election years and inauguration years, at 93 percent and 84 percent, respectively.