Bond and equity markets start another week with President Obama and the Republicans still gridlocked, deadlocked, stalemated and log jammed over differences on what it will take to raise the debt ceiling in a week's time. With the prospect of a default drawing nearer, gold may be the short term winner but a sell-off in equity markets will only improve what are already favourable valuations.

Otherwise, it will be another busy reporting week for company earnings - in the UK as well as in the US - and a busy week for economic news including figures for second quarter GDP growth due tomorrow for the UK and on Friday for the US. Weak numbers will not surprise given the loss of recovery momentum in the developed world but the question remains: how weak?

For corporate earnings the good news is that economic growth remains surprisingly robust in the developing world. In contrast to expectations for GDP growth this year in the major economies, expectations for growth in the emerging economies have barely altered. Strong emerging economies have had much to do with the earnings recovery for the big internationals, but then the recovery has been very much about the corporate sector and little about the personal sector, that is, strong growth in profitability and not about jobs or growth in real household incomes and consumer spending.

Interestingly, the corporate recovery has not been limited to the big internationals.

David Fuller's view This is an excellent issue by Brewin Dolphin's Chief Strategist, containing a number of informative graphs.