It is a year for modest economic growth and therefore modest earnings growth.
If we look at 2006, the expectation is identical to the start of 2005. People are talking about a slowdown and therefore corporate earnings growth will also slow down.
The market is being dominated by mergers and acquisitions activity -- all the fundamentals have fallen into the background.
We are due a period of slight relief. (But) we always have to come back to the question of valuations and, relative to gilts, equities are still incredibly cheap.
The thing behind it short term, without any doubt, is the merger and acquisition activity.
It has been another storming day with plenty of mergers and acquisitions activity.
Oil prices are effectively a tax and we want a low-tax global economy. I am happier with lower prices, even if the profits of oil companies come down.
The picture is not altogether clear that we have definitely reached the peak in short-term U.S. interest rates and that from here bond yields will start going down again.
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