Is the rally sustainable?

Updated

It's day five and markets are (generally) up. They're not just up, they're rallying, soaring. And just as was pretty easy for investors to catch the bearish mood, it seems even easier to catch the bullish one now. Nothing fundamentally has changed with the economy, so how come stocks are rallying? More than that, have we seen the bottom? Is this rally sustainable?

One important thing to remember is that the market and the economy, while related, do not move in tandem. Markets are forward looking, meaning they try to move ahead of the economy. Oftentimes, then, a market recovery signals an economic recovery is a few months ahead. Also, it means that the recession will continue even as the market has bottomed and a recovery -- in the stock markets -- has started. So is this it?

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