O'Neill: Is normality returning to markets?

Jim O'Neill, the chairman of Goldman Sachs Asset Management, said markets are displaying signs of a return to normality, boosted by an improving US economy.

In a note to clients, O'Neill said correlations between markets are now starting to revert to what he called a more 'normal' level, as US equities rise and bonds fall in response to more upbeat US data including recent non-farm payroll figures. "The markets are showing some signs of a return to normality," said O'Neill. "The third consecutive positive US payroll report has led not only to the market 'breakouts' I had been expecting, but correlations between markets are changing. "This past week the S&P 500 broke 1,400 while gold prices fell along with the euro and yen. "In addi...