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mpc: 7 Despite the turmoil in some financial markets, equity prices continued to rise, with the main US and European indices up 3%-5% since August. The apparent resilience of equity prices seemed surprising given the deterioration in the major economies' growth prospects. One possible explanation was that the continuing strength of the emerging market economies was expected to help maintain sales and profits of companies in the developed world. That story was consistent with the noticeably weaker equity prices of smaller companies, which were likely to be more reliant on domestic demand. Another explanation might be that globalisation had reduced the pro-cyclicality of profits, with wages and employment now expected to bear more of the burden in downturns. It was also possible that participants in equity markets believed that central banks would act to maintain output growth. Corporate bond yields ­ especially for higher quality borrowers ­ had been broadly unchanged since August.