This poses the question: how much worse could things get? For equity investors, few issues could be more important. There has for years been a close link between economic activity and equity returns; since 1996 the correlation between annual growth in world trade and annual returns on the FTSE All-Share index has been a hefty 0.56. During this time, we have not seen decent returns on equities without decent growth in world trade. The health of the world economy is therefore crucial for investors.
US yield curve and industrial production