GLOBAL MARKETS WEEKAHEAD-Unsynchronised recovery

By Natsuko Waki

LONDON (Reuters) - If markets are forward looking, investors might find themselves tempted to buy stocks and other risky assets just as major economies, most of them already in recession, deteriorate further.

The euro zone, Japan, Singapore and Sweden are already confirmed in recession and the United States, Britain and other countries are half way into recession as the credit crunch since August 2007 bites into consumption and corporate profits.

However, markets and real economies are not synchronised.

According to Barclays, in the early 1990s, when Sweden struggled with its banking crisis, the stock market rallied the month after the government intervened in banks, while the economy worsened and was in recession for another three quarters.

Credit Suisse estimates that equities reach a bottom up to five quarters before the trough in earnings and three months before troughs in earnings momentum -- which currently is close to an all-time low in Europe.

World stocks, measured by MSCI .MIWD00000PUS, have risen every single day after hitting a 5-1/2 year low on November 21, helped by a round of interest rate cuts and fiscal stimulus packages worldwide.

"Generally speaking, markets have a pretty good track record of seeing the end of recession before the real economy started picking up," said Rob Hepworth, senior fund manager at insurance firm Ecclesiastical.

"They are forward looking but they don't always get it right... My yardsticks would be that things get so bad, news seems so bad and it doesn't make stock prices go down. For me, then, all the bad news is in price."  Continued...