Watch the indexes this week and you would see very little happen: a quiet tape, low volatility, credit calm. Underneath, the market kept widening, sector by sector.
The question for the week is whether a market can look this calm on the surface while its parts drift further apart. This week it can, and the space between the two is the whole read.
On the surface, it is quiet. The VIX sits near 17, high-yield credit spreads are near the low end of their year at 2.69%, the yield curve is positively sloped, and jobless claims are steady. The one gauge that is not calm is inflation: headline CPI at 3.5% and core PCE at 3.1% are both still above the roughly 2% marker. By the headline numbers, it is a quiet week.
Underneath, the market is anything but settled. About 40.7% of the 2,735 companies we track sit in the top two turbulence bands right now, up from a more normal 28%, and most of that hot group, 62%, is still warming rather than leveling off. Turbulence measures the range of a company’s movement, not its direction, so a wide reading does not say which way a name breaks. It says price behavior is loosening, and it is loosening in more places than the index suggests.
The widening is concentrated, not broad. It runs highest in technology, where 81% of the hot names are still warming, with communication services and materials close behind. Health care holds the most turbulent names of any sector, 372 of them, yet it is the steadiest of the group at 48%. A calm index sitting over scattered, sector-specific motion is what the AI build-out looks like in the data: company-by-company dispersion, not a market-wide slide.
One thing worth understanding. Every measurement has a blind spot, and this week’s is worth naming. Turbulence reads how a stock trades, not what a company is hiding. Enron did not collapse because its stock slowly became turbulent. It collapsed because the market did not yet know what management was concealing. A calm turbulence reading describes how a stock has traded. It does not certify that every reported number is true.
The calm reading and the wide one are both true this week. They answer different questions: where the market is sitting, and whether the parts underneath are still moving. This week the surface says one thing and the internals say another, and the gap between them is still widening.
The Filter Lab app is where this goes name by name: which companies sit in each band, and whose turbulence is still widening. That is the natural next step from here.
See it in the Filter Lab app →
Descriptive, not advice. Macro data via FRED; company turbulence from the Filter Lab universe. Written with AI assistance to a fixed editorial standard and human-vetted before publishing. thefilterlab.app