The shaky stockmarket summer rally

The S&P 500 - America's benchmark index - has hit a new record high. But investors shouldn't get complacent.

The bulls are back. Last week saw America's S&P 500 index reach a new record. It is up by almost 20% this year. Global equities, as measured by the FTSE All World index, have also hit a post-crisis peak. A key sign of confidence, notes Jason Abruzzese in the Financial Times, is that defensive stocks are no longer spearheading the rally. In recent weeks, cyclical sectors, such as financials and industrials, have posted the biggest gains.

It's hard to share investors' enthusiasm. US data has improved but remain patchy. Elsewhere it's even less convincing. "Take the Western economies off the angel dust of money printing and super-low interest rates, and the current recovery' would disappear in a flash," says Jim Armitage in The Independent. Emerging markets are also slowing.

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