Weak start to 2008 provides context by which to judge near-term markets

European markets have just experienced the weakest opening half of a calendar year in living memory....

European markets have just experienced the weakest opening half of a calendar year in living memory. Index returns were considerably worse than any recent period, including the whole of the 1970s. In fact, no opening half of the year in the 1970s even gets close to 2008's -20.59% - the nearest is 1974, returning -11.01%. This is a good context in which to judge what markets are likely to do in the near term. We have experienced a near-lethal combination of one the largest financial crises of all time, a record high oil price, a sharply slowing economy and a hawkish ECB. Short of war or wi...