Gray: My view of the world in the second quarter

MAM Funds' Martin Gray (pictured) and James Sullivan, managers of the Miton Special Situations and Strategic portfolios, analyse key events in economies and markets in the first quarter of the year, and the outlook for a range of asset classes

EQUITIES Last year’s losers have all seemed to rebound as winners in the first quarter of 2012 with strength in growth assets matched by weakness in the value sector. Investors, driven by easy liquidity, have had a much more optimistic view of risk and outcomes than economists have had, for some time now. Corporate profit margins, particularly in America, remain at record historic highs – the question is, can companies continue to retain or even increase these levels, or will competitive pressure and weakening demand start to squeeze returns after such a golden period? CORPORATE BON...