Market Extra: Why the VIX might not be such a reliable ‘fear gauge’ right now

Don’t call it a panic.

Investors seem to be piling into traditional havens like Treasurys TMUBMUSD10Y, -0.15% gold GCM7, +0.94% and the Japanese yen this week. And stock-market volatility, as measured by the CBOE Volatility Index VIX, +1.20% widely known as Wall Street’s “fear gauge,” is at its highest since just after the U.S. presidential election in November.

But U.S. stocks, while looking shaky, haven’t seen an outright plunge. And other assets generally perceived as risky, including high-yield corporate debt and emerging market equities and bonds have held their own.

Kathleen Brooks, research director at City Index in London, argued that the phenomenon suggest the S&P 500 SPX, -0.68% which on Wednesday closed below its 50-day moving average for the first time since November, isn’t having its usual impact on other asset prices.

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