Global equities rally has room to run

America's S&P 500 index has rallied by 15% this year and has just reached a new record peak, the first new all-time high in seven months. The MSCI All Country World Index, which tracks global stocks, has also appreciated by more than 15% since the start of this year.

The rally in global equities may have further to go as investors return to the market. As BlackRock CEO Larry Fink told CNBC: "There's too much global pessimism. People are still very underinvested. There's still a lot of money on the sidelines". He added: "We have a risk of a melt-up, not a meltdown here."

For the boss of the world's largest asset manager, "that's hardly a surprising view", as Michael Mackenzie notes in the Financial Times. Still, whether or not there is a melt-up a parabolic upward movement the path of least resistance for equities would certainly appear to be up. The data has improved everywhere in recent weeks.

"It's time to be a little more optimistic about immediate prospects in the UK, European and global economies," says Jeremy Warner in The Sunday Telegraph. The worst threats facing the global economy a disruptive Brexit, Trump's trade war, or the Fed tightening monetary policy too quickly have passed, or at least receded for now, while China's growth has picked up again. Together, the US and China account for over half the global economic growth, says Michael Strobaek in the FT. They therefore provide "a solid indication about the state of the global economy".

This is starting to be reflected in US earnings, which global investors watch like hawks. Almost 80% of the members of the S&P 500 index have exceeded their expectations for the first quarter. Throw in supportive central banks following the recent growth scare, and the US-led global rally looks set to endure.