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Mohamed A. El-Erian

Market Calm May Be Short-Lived

Volatility isn't gone, it just took a breather.
A smooth patch.

A smooth patch.

Photographer: Gregory Boissy/AFP/Getty Images

Last week, global equity investors got a much-needed reprieve from volatile, loss-inflicting markets. But rather than signaling the start of a calmer market phase, this may well prove a prelude to renewed volatility in the weeks ahead.

After ending the last trading session of the previous week with a gain, global stocks got off to a good start last Monday. U.S. markets went on to post their best weekly performance since November, as two days of solid market rallies were followed by relatively calm consolidation. Markets in Japan and some parts of Europe did even better, registering gains of 5 percent to 7 percent.