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The current reading of the Investopedia Anxiety Index is above neutral, indicating a higher level of anxiety.

Markets Today

U.S. stock futures are edging lower ahead of the release of minutes from the Federal Reserve's June policy meeting that could provide additional insights into policymakers’ views of the economy and their efforts to tame inflation with interest rate hikes.

Oil prices have stabilized after plunging over 8% yesterday, with light sweet crude moving back above $100 per barrel. In the bond market, the yield of the two-year note moved above the yield on the 10-year note, inverting the yield curve, which is often considered a warning signal for recession. The U.S. dollar held at a 20-year high against the euro.

Yesterday, stocks had staged a comeback as the S&P 500 and Nasdaq ended slightly higher after losing ground earlier in the session. The Nasdaq ended up 1.7%, the S&P 500 edged up 0.2%, and the Dow finished 0.4% lower.

Treasury yields tumbled to one-month lows as investors fled to the safe haven of U.S. debt. The yield on the 10-year Treasury note is 2.82%. The yield on the two-year note was holding above 2.83%.

Safe-haven demand also strengthened the U.S. dollar to levels last seen in 2002 while the euro slumped to two-decade lows as the latest surge in European gasoline prices raised concerns about a recession.

Prices of major cryptocurrencies are slightly lower, with the price of Bitcoin just above $20,000 and the price of Ether just above $1,100.

Later today at 2 p.m. ET the Federal Open Market Committee will release minutes from its mid-June monetary policy meeting, where the Fed raised the federal funds interest rate by 75 basis points, the largest increase since 1994.

This morning, the Bureau of Labor Statistics will also release its Job Openings and Labor Turnover Survey or JOLTS report. Economists forecast there were 11.2 million job openings on the last business day of May, 200,000 fewer than in April, as the number of job openings remains near record levels.

Also this morning, the Institute for Supply Management releases its Services Purchasing Managers’ Index for June. The consensus estimate is for a reading of 54, about two points fewer than in May. The Services PMI has had two years of readings above 50, which indicates growth in the services sector.

What the Index Shows

The Investopedia Anxiety Index (IAI) is a gauge of investor sentiment based on the behavior of tens of millions of Investopedia readers around the world. A reading of 100 is considered "neutral."

The IAI is driven by reader interest on Investopedia across three categories of topics: macroeconomic (such as inflation and deflation), negative market sentiment (such as short selling and volatility), and debt/credit (such as default, solvency, and bankruptcy).

Background on the Index

In 2012, Seth Steven-Davidowitz published an article in The New York Times explaining how he used Google search results to uncover voter bias that pollsters were unable to find. As of March 2022, Investopedia has over 44 million monthly unique visitors, and with Steven-Davidowitz's work in mind, we asked ourselves, “What can the search behavior of our readers tell us about the state of markets and the economy?"

We have the data: more than 30,000 URLs of quality content going back before the collapse of Lehman Brothers and the 2008 financial crisis. I represented the editorial team and partnered with our lead data scientist Dr. Ronnie Jansson at the end of 2015 to search for patterns in our most highly trafficked materials. We carefully selected a selection of terms on topics that suggested investor fear, like "default," and opportunistic terms, like "short-selling."

Finding a signal in noisy web traffic data is difficult due the varied seasonality of our readership (for instance, traffic declines on the weekends) and exogenous factors like search engine results page (SERP) rank. We first needed to develop a methodology to remove this noise and produce an index that robustly tracks the actual ebb and flow of interest in the chosen topics.

When we looked at the results of the analysis the first time, we found that the major peaks in the index occurred exactly where they would make sense: around major events like the fall of Lehman Brothers (by far the most significant peak), the Greek debt crisis, and the U.S. credit downgrade by Standard and Poor’s.

In the final version of the IAI we used 12 definition pages, all with exceptionally high page view counts. We also now use several thousand more pages in the normalization procedure. In total we used close to one billion page views to produce the 10+ year monthly IAI plot.

We had set out to create a proxy or index for investor sentiment, but we needed an outside point of reference. The Chicago Board of Options Exchange’s Volatility Index (VIX), often referred to as "the fear index," is commonly used as a gauge of investor fear. We plotted the VIX next to our new creation, and the results spoke for themselves:

Investopedia Anxiety Index plotted against the VIX.

Over a period of almost a decade, the large scale features are very similar in the VIX and the IAI despite measuring different phenomena (stock market volatility and content consumption, respectively). It gets even more interesting when the two are overlaid on top of one another:

Investopedia Anxiety Index plotted plotted against the VIX.

Perhaps the most compelling comparison is at the very earliest point of the plot. For more than a year prior to the peak of the financial crisis in September 2008, the IAI was profoundly elevated (around 120 or so – a level that had not occurred in a single month in the most recent four years), while the VIX remained subdued, around 20. In other words, based on the VIX alone you would be caught completely off guard by the biggest financial crisis of our generation, whereas the IAI was an alarm blaring for more than a year before the crisis hit.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. The New York Times. "How Racist Are We? Ask Google."

  2. The New York Times. "Seth Stephens-Davidowitz."

  3. Chicago Board of Options Exchange (CBOE). "Volatility Indexes."

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