Bulls on the Run With global PMI rolling over yet again, slowing unemployment growth, and slowing EM Asia impacting global production, it is no wonder than global analysts sense the beginnings of a global economic death march. In fact, further rate cuts in the euro area and China along with around $500bn of NEW QE in this quarter are already priced into the market with any hope for risk assets to rally more consistently, investors will need to see not just willing-and-able central bankers but an abatement of the sovereign crisis in Europe and improvement in global data - neither of which they expect anytime soon. Industry has pulled in its horns until attitudes toward business change and policies move convincingly toward encouraging private-sector led growth.
Easier monetary policy will not cushion the blow from higher uncertainty in the US and Europe. Effective policy changes would thus have to come from compromises in the European Council or in US cross-party politics. Either that, or America's economically challenged leader must abruptly reverse course. Investors have yet to zero in on the real impacts of rising economic uncertainty in the US. A growing number of economists are arguing that it is unlikely that the cliff is fully priced into the markets and US leadership dysfunction and openly anti-business bias will share the spotlight with the European crisis over the next few months. The spectre of a full blown global recession early in the new year looms larger than ever.