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$8t Wiped Off World Stocks
World Economy

$8t Wiped Off World Stocks

World stock market losses are approaching $8 trillion so far this year and investors last week poured the most money into government bond funds in a year, suggesting they fear the global economy could tip into recession, Bank of America Merrill Lynch said on Friday, Reuters reported. The bank’s US economists also said on Friday that the likelihood of the world’s largest economy entering a recession in the coming year has risen to 20% from 15%. While a repeat of the 2008-09 great recession “is a big stretch” and even the one-in-five chance of a normal recession remains low, they cut their 2016 growth forecast to 2.1% from 2.5%. Reflecting the increasingly bearish sentiment engulfing world markets, some $7.8 trillion was wiped off the value of global stocks in the three weeks to Jan. 21, BAML said. “We cannot rule out a recession in the next year. Accidents will happen, and we are concerned about the lack of policy ammunition to deal with a major shock,” economists Ethan Harris and Emanuella Enenajor said in a note on Friday.

 

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