A rally in stocks since the start of the year may not be sustained, as the global recovery may not yet be translating to company earnings, says ETX Capital's Head of Earnings Joe Rundle.

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LONDON, ENGLAND, UNITED KINGDOM (JANUARY 20, 2014) (REUTERS - ACCESS ALL)

1. ETX CAPITAL HEAD OF TRADING, JOE RUNDLE, SAYING: (CONTINUES OVER REPORTER ASKING QUESTIONS)

REPORTER ASKING QUESTION: 'So what do you reckon, will the trend last?'

ETX CAPITAL HEAD OF TRADING, JOE RUNDLE: 'Well I think we're probably going to see a bumpy couple of weeks. I think the earnings are not going to be good, probably not as bad as suggested just before but I do think we are going to see a number of misses and we've already seen that today with Deutsche Bank. And the real question here is, is this recovery that we're seeing actually translating into earnings? I'm not so sure it is so I do think we'll see a pullback in equities after a nice start to the year.'

REPORTER: 'We've got news out on China this morning as well. The 7.7% growth for 2013, it's the slowest growth for 14 years. Is it as bad as it seems, do you think?'

RUNDLE: 'Well I think it's certainly a concern and that's kind of what caused the low pullback in equities at the beginning of the year. China is a sort of anomaly, it's such a powerhouse and it's such a big ship to turn around. I'm not sure that the figures actually represent the true economy, there's so many shadow economies going on away from government controls because it's very difficult to get investment there with the rigid controls they've got. So I think the economy is probably not as bad as suggested and China will continue to grow and drive the world economy forward. But any negative figures are always going to be bad for world markets.'

REPORTER: 'And looking ahead to this year and all the reforms that China wants to implement, has to implement, what are the potential roadblocks in its way, do you think?'

RUNDLE: 'Well China get the reforms across, they're incredibly difficult and trying to get them in a manner that the Communist Party wants to control is really, really difficult. I think the other key is external issues. I expect to see an emergence of the European debt crisis further on. I think this is going to come in a different form. I think this is going to come in southern European states, maybe a political change, saying we don't want to be part of the Euro anymore and almost calling Germans' bluff. Mrs. Merkel really wants the southern European countries in there to carry on with a weak Euro compared to what a Deutsche Mark would be and it's trying to force austerity. And if it actually has its bluff called, I'm not sure it will have to bail out the southern European countries. So it's going to be an interesting thing. I expect that to blow up in Q1.'