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Equities still face an uphill battle

Now that the S&P 500 has climbed above 1000 for the first time this year, is it time to sound the all clear for equities? We are sceptical. The rally is likely to peter out once the second quarter earnings season has passed. There are three key reasons. First, risk appetite should fade. Second, inflation expectations may be too rosy. And third, the recovery will be unusually weak.

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