More quantitative easing could be forthcoming

ON THE US

JAMES KINGHORN, senior investment manager at The Scottish Investment Trust on the U.S.

There is increasing speculation that another round of quantitative easing is on its way. Strong corporate earnings have helped mitigate some of the bad news. However, corporate guidance on the outlook for the economy has been underwhelming and investors should be concerned expectations for the rest of the year, and for 2011 in particular, are still very aggressive. Current consensus forecasts are looking for 15% profit growth in 2011, on top of the 30%-40% rise in 2010, to record levels. Given that operating margins are back to cyclical peaks, it seems unrealistic companies can genera...