Profits have been good and are lifting stocks.

It's good news for equity markets. One can be more positive on the outlook for rates. People were wondering whether shares looked expensive. After these comments, one could stay relieved.

M&A is a strong element of support for the stock market. It's pushing shares higher.

The economy is growing, and that means these companies will grow too.

All M&A news is strong support for the stock market. European shares remain attractive. Productivity gains will allow European companies to have good earnings in 2006.

The market expects 10 per cent earnings growth for this year in Europe and I don't think it's excessive. The risk is low. We are now at fair value.