With monetary accommodation from the Federal Reserve now always prefaced with the word "extraordinary," it is not surprising that we are seeing new records throughout the fixed income universe. The speculative grade bond market set a new record last week with the yield-to-worst on the Barclays Capital High Yield Index yielding below five percent for the first time. With yields at new record lows, the index also hit a new record high dollar price of $107.36.

During the depths of the credit crisis, the yield on the aforementioned index reached a record high of over 22%. Just four years later, the yield on the index has went from its all-time high to its all-time low. Today's index yield is less than the Federal Funds rate of 5.25% pre-crisis. In 2006, you could have made a higher yield on an FDIC-insured savings account than by lending to highly levered corporations in

Extraordinary rallies off bear market bottoms are typical. Bullish run-ups in March 2003 as well as March 2009 registered enviable unrealized gains of 35% and 65%, respectively; each advance experienced little resistance for roughly nine to 10 months.

Powerful moves off minor corrections are less typical, if not downright suspicious. Investors in the S&P 500 SPDR Trust (SPY) since mid-November have witnessed a soothing 22% ride to all-time highs in just seven months. In the last quarter century, you could probably count the number of times on one hand when U.S. stocks traveled a similar vertical trajectory for more than half a year without a significant hitch or pullback.

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Regardless of the reasonable nature of current valuations, there are plenty of reasons to doubt the slope of the movement. For example, equities have outshined comparable bonds by nearly 7% over the last four weeks -- a feat

By Sumit Roy

The chart below is from our recent newsletter, and it shows the average yield to maturity on the