It was good to see the Xmas rally continue with the FTSE reaching the high for the year before slipping slightly on Christmas Eve.
Markets have gently been climbing since mid September as economic fears subside and an element of optimism has been injected by US economic data which has been steadily improving.
On Christmas Day the Chinese authorities raised interest rates as the huge surge in growth has fuelled inflationary pressures which they needed to address.
As China has been providing the engine for the economic recovery there are fears that any significant slowdown will be felt across the world.
The reaction from the Far East has so far been positive with the markets returning in buoyant mood.
Despite all the economic problems in Europe with the countries debt mountains, the German economy has been experiencing a boom time as can be seen by the performance last year of the Dax.
Whilst governments are in a mess the stockmarket does not necessarily reflect the state of the domestic economy. The FTSE 100 companies for example earn 75% of their earnings from abroad.
Most fund managers are optimistic for equities this year as companies get there balance sheets in shape, dividend payments are set to rise and corporate activity builds up.
If the US can continue to recover and employment increases then 2011 should see a continuation of the 2010 economic recovery.
