Profits under threat should slowdown gain momentum

There were two major themes in global equity markets at the end of last year. First, the global equity bull market persisted. Second, the more cyclical markets on average continued to outperform. Emerging market performance was particularly strong and the Japanese market also delivered firm returns, following a period in which it had been one of the world's weakest markets. However, its relative performance in 2006 was still very poor. Recent macro data from Japan has suggested the economy's soft patch, which materialised in the summer, may be fading. In addition, the US equity market, on...