Pressure is mounting on the cautious. As the rally in riskier assets such as equities rolls on, so must the doubts for those investors still opting for caution over valour because of worries about the sustainability and extent of “green shoots” in the global economy.
If the nadir for stocks and credit was marked by the lows of early March, plenty of investors have been left behind. Indeed, it is not surprising to hear from bankers that some of their clients are scrambling to catch up.
The extension of the rally in riskier assets yesterday is further evidence that investors are placing their chips on how the recovery will look, not when the global recession actually bottoms. In such a transition period, poor economic news such as yesterday's US housing data are shrugged aside.