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Easy does it on the exuberance

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If it keeps going like this, Ben Bernanke will have to give an irrational exuberance speech.

Today, stocks jumped to fresh multi-month highs and Treasury yields climbed after a report on July manufacturing activity made investors feel even more optimistic about the future. Sure, manufacturing is still contracting, but that’s only a minor detail for those convinced that a burgeoning economic recovery is the real deal.

The giddiness helped push the S&P 500 above 1,000 for the first time in nine months and knocked more than a point off the benchmark Treasury note, bringing the yield to 3.64 percent.

If it were just Monday, it would be easy to chalk up the gains to a sleepy summer day of trading in August when second string traders are left in charge. But this stock rally has legs, and long ones at that.

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