30 August 2010 at 7:34 GMT
Equities continue to follow the overall risk sentiment and we do not expect this to deviate in the very near term future.
However, as with other data developments it is important to keep a close look at the smaller things that could develop into bigger issues. Intel’s downward revisions of sales expectations last Friday was exactly such a thing. It is our expectation that we are going to see a slide in earnings expectations for 2011, led by companies with global exposure and this will eventually lead equity prices lower.
But due to the uncertainty in forecasting within the current economic framework companies will be very cautious, but the trend is clear. On Monday we expect the European session to open 0.6% higher and we do expect this to continue higher in the early part of the trading session. This is not a risk rally setting off a new bull trend, however. It is a bear market rally and within the next couple of days we do expect the trend to turn downward again.