How much more volatile will stocks get?

Experts say markets are already volatile because of election year
President Trump

Buffalo, NY (WBEN) In a year where stock market volatility is almost automatic, how much more will we see after President Trump's hospitalization for COVID19 on Friday.

"Futures on the VIX going out until November are already very high, so there was already the possibility and now it's on the doorstep," Caleb Silver of Investopedia told WBEN on Friday. "Volatility and elections go hand in hand, and this will be no different, and the news will be more extreme," but Silver says while investors need to brace themselves short term, long term these issues will peter out. He notes the volatility index (VIX) has gone up five percent in 50 years.

Ed Hutton of Niagara University says there have been uncertainties about recovering from COVID19 in the fall already and now the president's illness will make a lot of people think a lot harder about how the nation responds to it.

"I think it's going to increase volatility quite a bit. There's not nearly this much certainty as there was when we were coming out of the recession caused by COVID," says Hutton.

Hutton notes the markets have been optimistic the economy would make a V-shaped recovery where prices and employment would go down and then recover very quickly. "Yes, we're still recovering some of the jobs lost, but it's very concerning the pace is slowing down, and if this truly signals a resurgence in the virus, I think we could be looking at the markets falling once again," says Hutton.

Hutton says the response to the economy will depend whether there is a resurgence, and if so, how long, and when a vaccine will come out. "There have been some positive news about a vaccine, but whether those tests will pan out, how quickly it can be distributed and whether people will take it will determine a lot of what happens to the economy and the stock market," adds Hutton.