Earnings growth for oil companies was exceptional and you can't expect that to happen every year.
If anything, that idea has gained momentum in this reporting season because a few investors were looking for earnings to slightly disappoint, especially in the U.S., and that clearly hasn't happened.
European equities are still reasonably cheap, earnings are very strong and interest rates aren't going up, so we have all the typical ingredients of a fundamental bull market for equities,
The market has been quite optimistic on those (companies) as they expect them to have done better than they originally thought.
European earnings will be better than some may fear for some time to come. Given the strength of current economic momentum. 2006 (earnings) growth should not have been revised down.
The valuations are still not a problem, earnings remain strong, MA is still in the picture, interest rates in Europe are still not a threat, and this should help markets go higher.
They may not have the pricing power that other companies have and the margins are under pressure even though the volumes are quite all right. I am much happier with the software side of things, which seem in a stronger position to benefit from the investment cycle.