Bears Lurk in Markets' Bounce: Analysts

The ongoing rally in global financial markets could be setting investors up for another crash, analysts tell the Financial Times, warning that it could be a so-called “bear market bounce.” The fact that financial stocks, which took a beating as markets tumbled, are leading the uptick is particularly worrisome: “In general, sustainable post-bubble rallies are not led by those stocks which are the bubble darlings,” said one strategist.

“The prominence of emerging markets, mining and financials in the recent rally gives me pause for thought,” he continued. “Especially when neither emerging markets nor mining are at bargain basement levels of valuation.” Earnings reports due in the next few weeks could burst the balloon, another adds: “Whether you are bullish or bearish, you have to be concerned about earnings and company guidance for the rest of the year.”
(More bear market stories.)