Rally led by narrowing credit spreads and positive newsflow

Today's market sentiment could not be much more different than it was seven months ago, when investors stared into the abyss.

The economy has avoided (so far) the Great Depression 2.0 that loomed in the minds of many. Since March, the stock market has rebounded by almost 60%. But how much has been down to fundamental factors that make the recovery sustainable? If we look at the latest quarter, US markets benefited from some positive economic news, such as an improvement in housing and ISM manufacturing, but it is quite evident that this latest rally has been led mostly by credit spreads narrowing. Smaller market-cap stocks, companies with higher debt levels and lower quality stocks have continued to rally si...