There has been a lot of M&A news and that makes stocks more attractive. It shows companies are still finding value and there is a lot of money to spend.
Earnings have come in mixed and you have to pick your stocks carefully. The overall outlook for the markets is good.
However, it remains to be seen as to whether these gains can be extended ahead of the year end -- profit taking is still a clear risk.
We are looking at where the next lift to markets will come from and people are not so sure. With oil prices this high, it will be an additional weight on markets.
In the longer term, you can't go too far wrong holding oil stocks with these prices.
Tomorrow is set to be another busy day on the U.K. corporate calendar and this stands to provide some direction, but U.S. economic sentiment in the aftermath of Hurricane Katrina looks set to continue to dictate where the major indexes go next.
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