WEEKEND ECONOMIST: Weakening worries

There are still no signs of the double-dip recession, despite data suggesting a general slowdown in the global economy.

The past month has seen sharemarkets and other growth assets climb a wall of worry, and that has remained the story over the last week. While economic indicators suggest global growth has slowed, there is still no sign of the double dip recession so feared a month ago. In fact Europe, which was the initial source of this year’s instability, has been surprising on the upside. While we may still see another bout of sharemarket weakness in the seasonally weak months of September and October, we remain of the view that a double-dip recession globally will be avoided. And with shares at very good value, monetary conditions set to remain favourable and China likely to start relaxing its tightening measures in the next few months, shares are likely to stage a strong rally in the December quarter and through 2011.


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