Economic future remains uncertain

After several years of challenging valuations within the equity markets against a backdrop of good fundamentals, investors are now faced with uncertainty over the economic outlook, with news on the margin continuing to deteriorate. The cutback in technology-related capital spending continues to depress the profits cycle. In addition to the likelihood of further bad news from technology in the second quarter profits season, the longer-term expected growth rates still remain optimistically high, as do valuations in the sector generally. Rising unemployment and a low savings rate suggest c...