Asset Class Returns "Normalizing"?

It amazes me that the same people that were talking about the end of the world in March, are now contemplating we are in "new, lasting bull". The WSJ reports (bold mine):

If stocks have already hit their bottom and are in a new, lasting bull market, then buying them would be the smart move, even though they have already risen some 23% (that is the DJIA, the S&P 500 is up closer to 27%) since March 9. Pessimists warn, however, that the market went on a very similar run from November to January before sinking again to new lows. This is another such bear-market rally, they believe, and new lows are still on the way.

So, do I believe we have seen equity lows? No... my concerns that the U.S. economy is still shedding millions of jobs, has a broke / indebted consumer AND government, and relies on the earnings of "healthy" corporations that can't get decent financing and struggling corporations that are just beginning to default still linger (though when the market does end up hitting its bottom, I will probably be saying those same things).

However, there have been signs of normalization. Asset class returns since the "equity market bottom" are actually "logical" in the sense that higher risk assets are returning more than lower risk assets down the line from equities to Treasuries (unlike what was detailed here).



Though I will say that high yield returns of 15% and equity market returns of 25% in a month and a half sure doesn't feel logical.