The recovery is not off the ground yet and there's a danger it could be nipped in the bud in its infancy. I think a lot of economists who have been very cocky over the last month, revising expectations up to ridiculous levels, are starting to backtrack.
We need to see a few months of data before we start getting too bearish. With many investors squared up for the August holidays we probably will not see the flows pick up until September, but you can still find enough value in the market to justify a reasonable weighting in equities.
All eyes are on Nokia tomorrow, and this bounce could be a short lived rally if Nokia disappoints.
The dollar has strengthened notably versus the euro in the past week, which will undoubtedly help provide a well-needed boost to European profits.
Valuations still remain high in the European technology sector. I see about 10-15 percent further downside in the sector before prices begin to get interesting again.
If Nasdaq got involved, there would be more momentum for a tech market in Europe.
