The old Wall Street adage "sell in May and go away" has given way to "buy, buy, buy in July."
A 600-point rally in the Dow Jones industrial average has caught many on Wall Street by surprise and wondering if it's just a bout of euphoria or a durable bounce.
There may be something real underneath the rally — a series of economic and earnings surprises along with an important recalibration of the outlook for interest rates and the Federal Reserve.
The U.S. Citi Economic Surprise Index has swung from around -24 at the end of June to +25 now. The better-than-expected jobs report, along with improved housing data and consumer spending powered the 50-point swing.
The index gives no indication about the level of growth, or even the future of it, but it does suggest that forecasters and the market had to catch up with better data.
The CNBC Rapid Update (the median of Wall Street's GDP tracking forecasts) is running at 2.7 percent, suggesting a decent bounce back from the weak first quarter. Yet only one-month's data are in for the second quarter. Sustaining the growth rebound would seem to be an important pillar supporting current market valuations.