Guides

The indicators that show up in the daily report, explained from scratch. What they measure, how to read them and which levels matter.

• 01What the VIX is and how to read itThe VIX is an index measuring the volatility markets expect for the S&P 500 over the next 30 days. Below 20 signals calm; above 30, panic.
• 02What an inverted yield curve is and why it mattersThe yield curve inverts when short-term bonds yield more than long-term ones. That is an anomaly: normally lending for longer pays better. It has preceded every US recession since 1955.
• 03Risk-on and risk-off: what they meanRisk-on describes sessions when money chases returns and buys equities, credit and emerging-market currencies. Risk-off is the opposite: money seeks shelter in government bonds, the dollar, the yen and gold.
• 04Credit spreads: what they are and why they warn before equitiesA credit spread is the extra yield corporate debt pays over government debt of the same maturity. It measures what the market charges for taking on the risk that the company fails to pay.
• 05Brent and WTI: what separates them and what the spread saysBrent and WTI are the world’s two benchmark crudes: Brent sets the price in Europe, Africa and Asia, WTI in the United States. Brent usually trades a few dollars higher.
• 06The dollar index: what it measures and why it moves everything elseThe dollar index measures its value against a basket of currencies rather than a single one. It tells you whether the dollar is strengthening broadly or whether just one pair is moving.