David Rosenberg explains what’s behind the global rally

The S&P 500 and Dow Jones Industrial Average neared their high for the year today.

European stocks are on their way to an 11th straight week of gains, the peripheral bond markets in Europe are showing signs of stabilization.

Gluskin Sheff's David Rosenberg says numerous factors have driven the recent risk-on trade:

• Upward revisions to US second quarter GDP and third quarter estimates.
• French and German GDP beat expectations
• There are more pro-euro comments coming out of Germany and there are rising hopes of an European central bank (ECB) intervention.
• Earnings are no longer negative and have been turning mixed, especially in the tech sector.
• "Dividend payouts remain impressive."
• Even though hopes of QE3 have dwindled there is a sense that the People's Bank of China can ease monetary policy further, which has helped commodity research bureau (CRB) commodity index rebound over 10 percent.
• "While government bond yields have risen from their multi-decade lows, high-yield bonds have stabilized and as such, junk bond spreads have tightened in around 40 basis points in the past month to 590 basis points, and this is a much more important determinant of P/E multiples and gauge of risk appetite than the direction of yields alone."

But perma-bear Rosenberg is still concerned because "the economic outlook still looks muddled" and because he still sees more of a "disinflationary" theme in the global economy

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