Rally may persist as vital elements fall into place

The UK equity market has staged an extraordinary turnaround over the past few weeks, shrugging off a...

The UK equity market has staged an extraordinary turnaround over the past few weeks, shrugging off a potential pandemic, further gloomy economic news and some serious long-term headwinds amid a few little glimmers of hope. However, with most managers still positioned very defensively and sentiment remaining poor, this cyclical-driven surge has been almost universally dismissed as an unsustainable bear-market rally. Our view on recent events is, in contrast, somewhat different. Firstly, we have not been all that surprised by the scale and nature of this rally given that, by early March, eq...