The first point to highlight is the results season has been very strong. Were looking at very strong year on year growth as the result of the recovery from the pandemic crisis of last year and as economies re-open.
This has been probably the strongest reporting season since the global financial crisis. If you think about it, it has probably been even stronger than that given the recovery has to some extent been synchronised globally, give or take a few economies that have remained in lock-down for longer than expected.
Although what we would highlight is that into the second half of the year, the comps effect is going to be tougher and therefore that momentum will weaken somewhat. We think the most supportive geographic area will be Europe, if you think about it, Europe has taken longer to come out of the lock-down, there are still some economies that have delayed re-opening and we think as we get into Q2 reporting and then into Q3 this geographic area will be more supported.
We are also looking at the positive leading indictors, both manufacturing and services, where we think the economic momentum will remain well orientated.
We think we are looking at a prolonged economic growth as the result of the infrastructure spending that has been deployed or pledged across the major economies. This, given the nature of the infrastructure spending, which is long duration by definition, has the potential to make this economic cycle more prolonged, which again be supportive for equity markets.
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