Market Comment
Whether on the sports field, political platform or anywhere else nothing makes compelling viewing quite like a close run contest. Right now global equity markets are subject to two key dynamics both vying to dictate market direction. In the red corner stands the champion, downbeat US economic data accompanied by high unemployment and operating under an ‘unusually uncertain outlook’. The challenger, a robust US earnings season, is relatively new on the scene with lofty aspirations and under no illusions as to the huge task ahead.

Caterpillar – Sell Half
Mining and construction equipment maker Caterpillar is literally at the coal face of global economic activity. Its operational performance provides an excellent insight into the level of investment in mining and construction, which in turn serves as an indicator of the global economy’s underlying health. It is therefore encouraging to see Caterpillar’s second quarter result tick all the boxes.

Google – Buy
Search advertising growth supported a solid second quarter result for Google. As online advertising becomes more and more mainstream, traditional brand advertisers are embracing search as a legitimate part of their budget. Google’s new businesses are comparatively small, but no less important for its future growth. Penetration of Google’s Android mobile phone operating system is increasing, creating an important platform for future mobile search revenue.

World Trade
In a broad sense investors have been pre-occupied with negative themes like the stress testing of the European Banks and how many might fail. To be sure more banking failures will be extremely unhelpful for the global economic recovery; but in the background central bankers are working hard to prevent a double dip recession as collateral damage of one or more European banks or countries default on debt payments. This seems increasingly unlikely.

Powershares Oil & Gas Services - Hold
While recent events have exploded the idea that oil and gas services companies are without risk the sector is still set to benefit from growing energy demand. With China recently becoming the world’s biggest energy consumer the long-term demand for oil and gas looks assured. Oil and gas services firms look set to continue to benefit as this demand keeps investment and oil prices high.