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Feeling good about the market

I have to say I am feeling pretty good about the market right now. We have bounced back nicely from the Japanese disaster and the turmoil in Northern Africa. Finally we are focusing on the fundamentals again and they are looking pretty encouraging. Chinese industrial production continues to impress despite interest hikes and inflationary worries. Leading indicators in the US and Europe are still at elevated levels which indicated significant growth ahead. Naturally, all eyes will be on the Q1 reporting season soon and I am optimistic that we will see a further boost for equities from that. Yes raw material prices are high but they are so due to increased demand which is boosting margins and is more than offsetting the effects of higher input costs. I’d be looking for companies that are mainly doing B-2-B and have shown superior pricing in the past. Those are the most likely to shrug off margin worries and should see handsome reward from the stock market. Perfect examples are the Swedish capital goods giants such as Atlas Copco and SKF.

I am long and hope you are too…

(www.nordicinvestor.de)

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