A 'last hurrah' for the bulls

The stock market rally is doomed – but it needn't end just yet. With the 'greatest monetary and fiscal stimulus' in US history, equities could rise to 1,100 on the S&P 500 before the end of the year.

"Bullish snorts" are getting louder, says Robert Lenzer on Forbes.com. Global stocks have gained 35% since mid-March, and equities' ongoing rise suggests investors are betting that the signs of growth falling more slowly are a prelude to growth rebounding rapidly. According to JP Morgan's latest outlook, "the world economy is bottoming. The recovery is set to be a clean V."

A V-shaped recovery may be good news for the economy. But investors should note that sustainable bull markets don't begin with a V shape, like the pattern seen in stockmarkets in the last four months, says John Authers in the FT. History's worst bear markets usually end with minor falls followed by gradual upswings, buttressed by rising trading volumes. This year's sharp fall has been followed by a strong rally while volumes have actually fallen.

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