The average return of U.S. equity mutual funds in the second quarter, a stunning 19.77%, was certainly welcome news, but it gave investors absolutely no reason to believe the stock market was turning around. After all, what fundamentals were there?

The market's surprising ascent was obviously not based on earnings, which continue to be steeply negative; the consumer, who's still saving 6.9% of their earnings rather than spending; an improvement in unemployment, which is projected to top 10% this year; or corporate investments, research and development, all of which are stagnant.

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