Is a global recession on the way?

A growing consensus is forming that 2007 will be a period of recession in the US. Andrew Selsby and John Robson of RH Asset Management review four key bear market indicators - and their findings suggest the pessimists may well be right...

We reported previously that a highly regarded analyst to the investment industry, Lowrys, said that recent stock market volatility is greater than at any time for 55 years. Also, David Schwartz, the renowned stock market historian, said that bear markets have always followed, if in May for a protracted period, stock markets have fallen significantly, which is exactly what happened this year. Declines in such a developing bear market, he says, are likely to be significant, at least 27%.

There is a growing consensus that 2007 will be a period of recession in the United States. If that turns out to be so, then the time to be worrying about investment markets is right now because recessions are lagging indicators of future stock market action.

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