Despite grim outlook, all is not lost for market bulls

LAST week, major stock indexes had their biggest declines since 2011 and the Dow Jones Industrial Average finished in official correction territory, more than 10 per cent from its May record high amid fears that another global recession is at hand.

While the selling could pause this week, there's now a good chance that the US could follow China into bear-market territory, which would be a loss of 20 per cent from the highs on the Dow and the Standard & Poor's 500. Few believe that pockets of strength in the US economy can compensate for wilting growth in China and Europe.

And that strength - much of it in the consumer-dependent housing, technology and pharmaceutical industries - could be choked off if the Federal Reserve proceeds with its plan to raise interest rates.