The bulls continue to rule the roost as the FTSE posts further gains.

Upbeat economic data released this week has helped to convince many investors that recovery is already underway.

Rising commodity prices have helped to boost stocks.

Merger activity, with US Kraft Foods making a £10.2bn bid for UK chocolate maker Cadbury has tipped more fuel on the flames.

And generally there has been a sharp improvement in market expectations for a recovery.

Meanwhile, the bulls are also charging in New York with the S&P 500 index heading for an 11-month high and Europe’s leading shares rose for a fifth day in succession.

Is it all too good to be true?

On the flip side, companies that boosted earnings through expense reductions may find fewer opportunities to cut costs next year. And increasing joblessness means investors are relying heavily on government spending to drive growth in corporate earnings.

We’ll see.