2012: Turbulent year ahead for global stocks
History suggests that stock markets can move sideways for a decade after a big crash. It is reasonable to assume that 2012 will be like 2011, a sideways year with many twists and turns in response to political and economic developments.
The median forecast for US growth for 2012 is 1.8%—low in an absolute sense, but not recessionary. Brazil’s economy has stalled in the third quarter of this year—annualised growth has fallen to 2.1%, coming as it does against the backdrop of a strong 2010, when the economy grew 7.5%. All the three largest emerging economies—China, Brazil and India—are all now slowing, according to their latest GDP figures.
The eurozone crisis is hitting confidence while economic slowdown in Europe and the US is undermining demand both for manufactured goods from emerging markets and for minerals produced by resource-rich countries such as Brazil.
While developed economies have been struggling to generate growth momentum, emerging economies have had the opposite problem. Super-easy monetary and fiscal policy
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