Equities continue their rally spurred by government plans to massively invest in economies across the globe. Economic data still looks horrible.


What's going on?

Significant rally in stocks on Friday, however based on decent volume. Optimism and risk-willingness are back – also judging by AUDJPY, Crude and other commodities (all higher). Analyst expectations from the big houses are relatively bullish, forecasting that the S&P500 will rise by +15 percent towards year-end.

We won't argue with the sentiment, which has apparently priced-in all negative data, so it looks like more upside – perhaps through all of January. This may also be a result of short-covering.

Despite the positive sentiment, both economic and earnings data is still really horrible and we still see a lot of focus on earnings.