Morning Notes — Volatility

The S&P 500 will struggle on rally attempts as long as equity market volatility remains elevated (VIX Index above 20).  The VIX broke through 20 on January 6th and it usually takes a few months for volatility to subside.  Adding equity exposure during periods of elevated market volatility can be a frustrating uphill battle.  But the stocks that hold up best during these periods tend to dramatically outperform once the volatility recedes. It’s also important to keep a tab on recent earnings beats like those listed above.  The muted upside for these companies today will be recognized once pressure comes off markets. There should also be delayed recognition of strong data.  And details of today’s Jobs Report including robust job creation, increased participation and softer wages should headline a bullish cyclical narrative.