Don't be afraid - there's still life in the global bull market
Some of that is for good reason - the eurozone's recovery is still extremely modest, China's growth is slowing (along with most other emerging markets) and investors are uncertain over the ability of the halfway-recovered US and UK economies to sustain higher central bank interest rates.
But fear not. There's still life in the bull market yet, according to analysts at Citi.
A team of the investment bank's global equity analysts still expect a 20% gain in stock worldwide by the end of 2016.
The authors of a note sent out to clients on Monday keep a "global bear market checklist," with factors like global earnings growth, global investment growth, analyst bullishness, and the net debt of companies compared to their earnings. And it's not looking particularly bearish. Here's a snippet from the note:
In 2000, almost all our 16 factors were flashing red. In 2007, we had 12.5 factors sending warning signals. This compares to 3 now, although this is up from just 1 a year ago. This suggests that a sustained bear market is still unlikely but we will continue to watch these variables closely.
That certainly doesn't sound too alarming.
The eurozone and Japan are best-placed for the continuing bull run, according to Citi, since both regions have both strong earnings potential and central banks ready and willing to flush the markets with more quantitative easing.
Here's another part of their case for a continued stock market climb:
Citi's global head of credit products strategy Matt King uses a "credit/equity clock" to assess what stage of a cycle financial markets are in - and based on that, the analysts reckon both the US and eurozone rallies are in the third stage, where credit spreads widen (signalling a riskier climate) but equities are still climbing.
The note suggests this period of a "mature" bull market can last for as long as three years, and there could be considerable time left to go.
There's one thing that's a major risk to their outlook. And that comes from the bank's own chief economist, Willem Buiter.
Buiter is forecasting a "global recession" - meaning a period of growth well below the world's potential, rather than an outright contraction. He's one of the economists who believes that China's real growth rate is considerably lower than the 7% the government reports, and that it should be closer to 4%.
By the middle of 2016, Buiter reckons China's real growth could be around 2.5%, which would certainly weigh heavily on global growth, and provide a drag on stock markets around the world.
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