We had expected earnings to be a positive trigger this year and this is taking place.
European equities are still reasonably cheap, earnings are very strong and interest rates aren't going up, so we have all the typical ingredients of a fundamental bull market for equities.
If anything, that idea has gained momentum in this reporting season because a few investors were looking for earnings to slightly disappoint, especially in the U.S., and that clearly hasn't happened.
Earnings are the big variable for European stock investors this year because unless you believe earnings are going to come off sharply, it is very hard to be bearish on equities.
We think we'll see a very decent year in 2006 and as the market gains momentum more people will change their very cautious views seen late last year.
They may not have the pricing power that other companies have and the margins are under pressure even though the volumes are quite all right. I am much happier with the software side of things, which seem in a stronger position to benefit from the investment cycle.
Earnings growth for oil companies was exceptional and you can't expect that to happen every year.
Tech has missed out on the market strength over the summer months. In an otherwise beta-led rally, IT Hardware is the stand-out exception, having recorded the worst three-month performance.
The market has been quite optimistic on those (companies) as they expect them to have done better than they originally thought.
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