Declining markets are punctuating a particularly long equity market cycle, which began in 2009. However, it is likely that the decline is only temporary and is not unlike that of 2011.
All this suggests that China should demonstrate its ability to manage its slowdown and that there will be no recession in the Uni ted States any time soon. The ongoing capitulation on the emerging markets does not seem mature enough to justify taking on more risk right away. We are more comfortable about the resiliency of consumption in developed countries, especially the United States. By the same token, this theme may focus hopes for profit growth, which is necessary to justify the start of a new equity market cycle.