Investors rushed into stocks on Thursday after stronger-than-expected GDP sent the bulls off to the races.
The Dow surged by triple digits after the Commerce Department said gross domestic product rose at an annual rate of 3.5 percent, the best increase in two years and broke four consecutive quarters of declines.
Coming on the 80th anniversary of the stock market crash that triggered the Great Depression, it was the best indication yet that the longest recession since then has ended.
But before you buy yourself a red cape and matador’s hat to navigate the bull run – you might want to stop and take a breath. The bears may be down but are they out?
Many analysts believe it may be hard to keep GDP growing. The economy was bolstered during the third quarter by government stimulus programs including the popular Cash for Clunkers auto rebates and tax credits for first-time home buyers. Once the government's stimulus measures run their course, analysts are worried the economic rebound might not be sustainable.
Also high unemployment and weak consumer spending continue to vex the economy.
The question is will it get back on its own sound footing or will it continue to hobble, says Wyatt Crumpler, vice president of asset management at American Beacon Advisor. We're a bit pessimistic in the short-term.
You might say David Rosenberg, Gluskin Sheff chief economist & strategist is a bit pessimistic too. “Don’t forget just how much medicine the government administered to get that number to 3.5%. If you look at the economy outside the stimulus -- the GDP was flat,” he tells Fast Money emphatically!
Rosenberg is a widely celebrated bear. And as far as we can tell, he's not changing his tune anytime soon.