Editorial

The warning shot fired by Standard & Poor's, which issued a negative outlook regarding America's debt picture, did nothing to undermine equity market optimism. Admittedly, macroeconomic data remain favourable and the initial round of corporate results released for the first quarter of 2011 did not disappoint. While economic policies are on the brink of changing their accommodative stance, especially in Europe with the ECB's rate hike in April and budget adjustment plans underway in many countries, our preference lies with American equity. The Federal Reserve has been sticking to its zero-rate policy and budget tightening is still not on the agenda, due to the Congress's failure to reach an agreement, though a breakthrough is bound to happen one day or another.