European stock markets are heading into the Christmas season amid a flurry of corporate activity as buoyant prices encourage share sales, while the US Federal Reserve's interest rate decision will also feature.
Placings of shares have jumped in recent weeks as companies and governments seek to tempt institutions to part with cash built up by generous dividends and share buyback programmes and with banks and brokers keen to get end-of-year business.
The Eurofirst 300 Index hit a near two-and-a-half year high of 1,042 points a week ago, providing further incentive for sellers to offload their stakes.
"People are probably thinking that now is quite a good time to go to the market, there's quite a lot of optimism out there," said Daniel Birch, a strategist at independent broker Execution.
With markets enjoying the traditional year-end "Santa rally", such placements were seen likely to continue next week, but some investors are wary about the surge in activity.
"It's not a positive thing that there is so much stock hitting the tapes," said Stewart Higgins, a fund manager at Martin Currie in Edinburgh.
"We haven't participated in any of it. I just get nervous when the brokers are lined up to ram stock down your neck. I think you've got to have a healthy degree of cynicism."
Corporate results have slowed to a trickle with the third-quarter reporting season now all but completed.
With just two weeks until Christmas, retailers will be in the spotlight after anecdotal reports that High Street spending has been sluggish.
Third-quarter earnings from fashion retailer Inditex are due tomorrow and November sales from rival Hennes & Mauritz on Wednesday. A trading update from Kingfisher, Europe's biggest home improvement group, is also due on Wednesday.
Trading updates from the UK banking sector - which accounts for a 23 per cent weighting in the FTSE 100 - will pick up pace with Lloyds TSB, HBOS and Alliance & Leicester all stepping up to plate.
In addition to guidance on how banks are faring in an unpredictable business environment, investors will be looking to see how balance sheets are being affected by accounting rule changes. Tomorrow, holiday operator Club Med posts annual earnings, construction and telecoms conglomerate Bouyges reports third-quarter earnings on Wednesday while Danish food group Danisco follows with half-year results on Thursday.
VNU, Cadbury Schweppes and P&O update trading on Wednesday.
Europe's third-quarter results have been solid rather than spectacular, confirming analysts' forecasts for earnings growth of around 27 per cent for 2004.
Analysts expect earnings growth of 10-12 per cent across Europe next year but some investors think those estimates may prove to be too optimistic.
"As we've come into the recovery phase, the psychology has been to be a bearish and the reality has been a bit better.
"Maybe next year we will go back to the more normal circumstance which is to start off a bit bullish and it turns out to be not quite as good as that," Martin Currie's Higgins said.
Global growth is expected to slow after a healthy burst in 2004, but interest rates in the United States at least are set to rise from their historically low base.
The Fed is widely expected to raise its benchmark interest rate to 2.25 per cent tomorrow but debate over the pace and scale of further rate hikes remains a key issue.
"The big question going around economic circles in the city and on Wall Street is 2.5 per cent the neutral rate or will they go to four per cent," Execution's Mr Birch.
"I think (Federal Chairman Alan) Greenspan will steadily increase rates to 2.5-2.75 per cent over the first half of 2005 then see how things are going with the dollar, and what's happening in Asia, particularly with China."
While rising interest rates may not be good for equities, they could be worse for other assets.
"We really think that US Treasuries are completely overvalued, they're just not obeying any fundamentals. We expect a broad-based sell-off in the Treasury market to happen quite soon and if that happens, you'll get a basic asset allocation switch back into equities," Mr Birch said.
The expiration of a host of futures and options across Europe and the United States on Friday could add another degree of volatility in the Christmas run-up.