Contents

Global Equity Performance – By Region..……………………....5
Global Equity Performance – By Sector..…………………….....6
Global Equity Valuation…………………..……………………....7
Global
Asia leads, US and Europe to Follow…………………….…….9
Leading Indicators Turning Up……….....................................10
Broadening Signs of Recovery……..…...................................11
Monetary Policy: Tightening Remains on Hold..……………...12
Liquidity Still Plentiful But Slowly Being Wound Back………..13
Excess Liquidity Finding its Way into Risk Assets..………….14
Earnings and Valuation……..……..……………………………15
Europe Valuation Relatively Attractive.………………………..16
Europe
Weak Labor Markets a Drag on Recovery……………………18
Sentiment Improving But Not Yet Consistent ….…....………19
Further Curve Steepening Coming?.......................................20
Strong Dollar Positive for Europe Equities…………………....21
What’s Working? Low Quality………..…………………..........22
European Equities Attractive Relative to US…...…………....23
Early Cyclicals are Less Attractive……….….…………..........24
Asia Ex-Japan
Exports Show Almost no Sign of Improvement Yet………..….26
Special Focus: China – Green Shoots Have Taken Root........27
Special Focus: China – Exports Remain Weak……….............28
Special Focus: China – Surging New Loan Creation .……......29
Multiples Back at 2007 Level…………………….…....…………30
Performance: What’s Working? Low Quality…..…….…………31
Japan
Current Recovery Pace Slightly Ahead of Previous Cycle..….33
Sentiment Indicators: Slightly Improvement .…………………..34
Money and Credit in Japan………………………………………35
Growth Expectations Stabilizing at Low Levels?..……….…….36
What’s Working? Low Dividend but High PB Outperforms …..37