Stocks have not been the only asset class to bounce back since mid-February, high yield bonds have also made a rapid recovery. Charles Reinhard, head of portfolio strategy at MainStay Investments (MMHAX) , said junk bond returns are looking prettier each day. 'Spreads in the high yield market today are seven percentage points over Treasuries, the yield is about eight percent and we think that is a generous compensation for the amount of risk we see because we see the economy growing still and oil prices are up off of their low,' said Reinhard. Reinhard is also positive on municipal bonds despite increasing worries about defaults and downgrades in Puerto Rico and Chicago. He is especially bullish on the high yield sector of the muni market, saying valuations are cheap and after-tax income relative to Treasuries is enticing.
More from Emerging Markets
Markets got hit hard in May when trade talks broke down and the president instituted new tariffs, but things are different now.
There's a lot going on right now and the markets (and media) have difficulty latching on to more than three or four stories at a time.
This may be a case where the short-term damage to markets may be for the best in the longer run.
Growth will keep falling off a cliff unless Fed Powell comes to the rescue. But it is unclear whether he can, or will.