The recent share price rally on Wall Street has been backed by very light trading volumes, one analyst has cautioned.

Aidan Donnelly, Head of Equities with Davy, said the bounce from the lows of March 23 would have to be backed by money and transaction volumes in order to be sustained.

There is a debate among analysts and investors at the moment as to whether the "bottom" was reached last month following a big stock market selloff globally in the wake of the coronavirus pandemic. 

Wall Street slumped into what is known as a "bear market", defined as a drop of 20% or more from their most recent highs. The main markets shed about a third of their value.

"The one caveat I would see is there hasn't been much volume behind the rally, so therefore, it would give you a little pause to question the validity of it," Aidan Donnelly said.

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"We've seen these bouts of glass half-empty, glass half-full. Last week was a glass half-full week," he stated.

Most of the main US banks reported for the first quarter last week, but traders were expecting bad numbers as they awaited a first indication as to the extent of the damage of business closures arising from the Covid-19 pandemic.

"What investors are looking for is less about the numbers and more about guidance for the quarter and the year ahead. In some cases, they're pulling guidance completely," Mr Donnelly said.

Some of the big tech names, such as Netflix and IBM, are due to report this week with analysts expecting better outcomes from the companies that have largely benefited from people staying at home and working remotely.

However, on the other end of the scale, some of the US airlines, including Delta and Southwest, will also be reporting.

"For them, it will be about can they sustain their operations in terms of liquidity and cash flow while this lasts and what's the plan to get their businesses back on track," he concluded.