(Bloomberg) -- The stock market may have hit the sweet spot of volatility.

The CBOE Volatility Index (VIX), a gauge of fear, closed Thursday at 15.01, its lowest since before the pandemic took hold in March of last year, and fell on Friday before edging higher again. 

Liz Ann Sonders, chief investment strategist at Charles Schwab & Co., says this level of volatility may persist, but adds that behind it is some real movement: Some stock sectors are dominant for a few days, only to be replaced by a surge elsewhere.

“The VIX can stay fairly subdued,” she said in an interview on Bloomberg TV’s Surveillance on Friday. “But that doesn’t mean you’re not going to continue to see some of these underlying leadership shifts and some of the swaps that are happening, even on a day-to-day basis, where you’ll see energy at the top of the leader board for a day or two, and tech at the bottom. And then you see a complete reversal of that.”

Concerns that inflation is accelerating, driving bond yields to their highest levels in months, are playing a part. So is the ebb and flow of the Covid-19 pandemic and its effect on global supply chains and economic growth.

“Those shifts are keying off, these days, to a great degree the bond market and what 10-year yields are doing,” said Sonders. “For a while there, those leadership shifts were keying off of the Delta variant. That seems to be less of a force now, and let’s hope that stays in the rearview mirror.”

The VIX is averaging close to 20 this year, yet Friday’s trading finds the S&P 500 Index with a gain of more than 21% in 2021.

All in all, “some rotational corrections, which have characterized much of this year, are likely to persist,” she said. “But there are enough offsets when you go through these pockets of weakness that the net is, it keeps the index level declines to a fairly benign degree....That’s a pretty benign way to ease, whether it’s sentiment excesses, technical excesses, valuation excesses.” 

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