Profit forecasts for Europe are still far too high.

The performance of European equities corresponds closely to the strength of the dollar.

They have been appallingly managed, particularly regarding acquisitions. Shareholders will be asked to dip into their pockets to pay for management mistakes.

As for equities as a whole, we are not expecting a great performance over the next 12 months.

We think the odds are that a recovery is under way but we don't think it will be a terribly strong recovery, and our biggest issue is that valuations are not particularly attractive even now.

I do believe that what we're seeing here is profit taking, which is a means of insurance that you need to take when the market has run very hard into a profit season that's got very high expectations about it,