Our Observations: Short-term and near-term volatility are nearly at parity in every asset class. We think we may be entering a period that is usually weak for stocks, where the increase in volatility might simply be an acknowledgement of that case. However, as of right now we still see there is very little evidence supporting the breakdown of the current bull market.
Market volatility is an indicator of financial stress. Low or declining volatility environments may indicate favorable periods for equity investments, whereas rising volatility periods may favor sovereign debt and developed market currency exposure.