But, while sentiment remains poor and markets jumpy, an increasing number of commentators are beginning to search for a bright side to the recent decimation of prices seen across financial markets.
And, while none of them are particularly dazzling, they do bear mentioning, if only to lighten the mood of those whose portfolios are looking a bit punch drunk.
The first positive is that, after all the falls, stock valuations look a little healthier than they did, which is good news if one is betting on recovery rather than annihilation from here.
Indeed, as European Wealth pointed out in its latest note, prior to the falls, “the US equity market had just had one of its longest ever bull runs without a 10% correction.”
In that context, the falls seen in the US take on a slightly different tenor, especially if one believes, like European Wealth does that the falls were a normal correction in a longer-term bull market, rather than the beginning of the next crash.
That is not to say that the firm is exceptionally bullish, but it does not yet believe it is time to panic.
Even within emerging markets, some of the braver investors are seeing opportunities within the significant pessimism.
Ross Teverson, head of strategy for global emerging markets at Jupiter Asset Management, believes the price declines open up significant opportunities for stock pickers.
“In general, we believe the market is overly focused on the perceived risks to China and EM in general. For evidence of this, one need only look at the very negative scenario that valuations are pricing in. The average price to book ratio for stocks on the MSCI EM index is now less than 1.3x – a level not seen since early 2009, when emerging markets were still reeling from the impact of the Global Financial Crisis,” he said.
