JOHIM's Jeff Keen explain where risk averse investors should be turning in volatile conditions.
The world has experienced a growth scare. The falls in risk assets in early August are fully consistent with that. Eurozone solvency has been a major concern but it is the slowdown in growth that tipped investors over the edge. Weak GDP growth for Q2 in the US was well below expectations but it was the downward revision to Q1 growth that really shocked the markets. This led most forecasters to slash their forecasts of growth for 2011 as a whole and we should expect that process to continue for some time yet. With annual growth below 2% in the US, the chances of a recession have increased...
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