Considering we seem to be going through a worrying phase at the moment in the markets there are large percentage of very positive statements coming out. Lots of companies reporting best ever results and saying the outlook is good. Shell, BT, BAT, Rolls Royce, L&G, Reed Elsevier all reporting excellent figures today amonst 1 or 2 bad ones today.

John Piper (tech analyst) predicting the very worst for the markets in the coming months. I think if we can keep a lid on inflation, some peace in the middle east we will see a good rebound. How do you read it??????????

Re your point Kivver

"I would have thought, a good economy, good results from companies would lead to a postitive market, but maybe not. "

I would say not if we're looking at short and medium term moves -- its about ratings - PEs. These can be v high as we have seen in the late 90's or reasonable low as we see now or in the 70's. It is the de-rating or re-rating of the market that is the biggest factor in market fluctuations -- not v.long term market direction though.

When interest rates rise - esp long bond rates -- and/or inflation rises PE's fall, and vice versa -- hence now earnings are great but the market goes nowhere.

I think it is, that when the Fed raises rates, PE ratios rarely rise and infact normally fall as we are seeing now.

So a market rally will depend on 1. Whether the Fed stops
2. Whether the bond market rallies - yields fall
3. Whether the slowdown the interest rate rises have been trying to achieve hits earnings too hard

Either way the market seems to be indicated that the derating of the market could at least be stopping for now -- look at recent bond rally and possible Fed stop after August rise. But there is a saying that the markets discount everything twice - so when the companies start reporting weaker earnings in Sept and October due to the slight slowdown we are now seeing they, individually, or the market as a whole could fall further. It is at that point - when your "good economy, good results" have disappeared - when the market might just put on a bit of a show -- re-rating the earnings albeit lower earnings.

November seems a good bet to put some money in -- Indeed I think I have just talked myself into it !!