Companies are cautious for the second half of the year. It's been a mixed bag so far for results.
We have a level of growth now in the world that is low enough for the Fed not to raise interest rates by a lot, but high enough for companies to grow profits in a very good way. Equities are the least over- valued asset class and growth is very decent.
It looks like the European economy is turning a corner and that is good news for stocks.
It shows growth for the U.S. economy but also points that the Fed will keep raising rates. Growth is good, but everybody is afraid that the Fed might kill growth if they do hike too much. That is a fear and could be the biggest headwind for equities this year, if it happens.
Companies seem to be doing well across the board.
Some companies have given disappointing results. Their shares suffer in an environment with risks, including high oil prices and rising interest rates.
The companies are profiting from these higher prices. This is becoming a familiar picture among energy and mining stocks and we expect it to continue.
Production costs have now become the most important factor for oil companies. They will drag down the shares.
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