Stockmarkets: the return of the bull?

Unexpectedly strong results from Goldman Sachs and JPMorgan set the tone for a recovery in stocks. So are we back in a bull market?

Stocks have recovered from their summer swoon. The FTSE 100 has gained 8% in seven days, its best run in four years, while the S&P 500 is up by a similar amount and has reached its highest level since last November. Unexpectedly strong results from Goldman Sachs and JPMorgan set the tone. Intel and IBM also produced positive surprises. Early this week Goldman added to the bullish mood by saying it expected the S&P to finish the year another 15% higher.

Yet while investors may be feeling perkier, "there's still so much evidence that the bearish fundamentals are little different to a couple of weeks ago when share prices were heading lower", as Angus Campbell of Capital Spreads puts it. Strong results at Goldman Sachs and JPMorgan don't mean that the banking crisis is over , while the latest news has hardly been wholly positive. The overall macroeconomic data are still merely "getting less bad", agrees Edward Hadas on Breakingviews.com.

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