So with this week vital for short-term sentiment in the markets, what about looking a bit longer out?
Well, confused is the best we can say.
No matter where you look, the lack of clarity is quite telling.
The argument about the US de-coupling and suffering a slowdown on its own, with only minimal dislocation to the rest of the world has been dismissed. Likewise the fact that Australia will somehow be protected by its close links to the still buoyant economies in Asia.
Japan is in danger of toppling into recession and no matter how we look at that country, it is still our biggest export market.
The head of strategy at the AMP, Dr Shane Oliver says things could get a bit worse before a second half recovery.
"After sharp falls from their October/November highs, shares have become oversold and are likely to stage a short term bounce led by the US share market.
"Anticipation of further monetary easing by the Fed and a possible announcement of fiscal easing by President Bush in his January 28th State of the Union address may be key drivers.
"Share valuations are also now very attractive (e.g., the forward PE on Australian shares is 13.9 times which is well below its average over the last 10 years of 15.3 times).
"However, notwithstanding prospects for a short term bounce the ride for investors in shares is likely to remain rough over the next six months on the back of worries about the US downturn and its impact on profits. Worries about the impact of the US downturn on China will also weigh on the Australian share market. As such, it is a time for investors to be relatively cautious.
"Through the second half of the year we expect shares to clearly resume their rising trend helped by sustained monetary easing globally, increasing confidence that the US economy is through the worst and attractive valuations for shares.
"As such while it may not look like it at times, through the year as a whole shares are likely to rise in value.
"Bonds continue to offer subdued returns thanks to low running yields. Australian cash, with bank bills around 7.2%, looks a better bet.
"The $A is likely to have a rough patch over the next six months on the back of ongoing worries about global growth.
"However, it should remain strong and be trending back up in the second half."
But even allowing for his relatively optimistic stance, there are a couple of warning signs we should be watching closely.
In Australia its next week's Consumer price Index Inflation figures (and the accompanying core figures from the Reserve Bank) and then the RBA board meeting the following week.
In the US its signs, apparent late last year, of a worsening outlook for credit card and car debt which is now are growing more evident.
Last week's warning by American Express of mounting credit-card defaults and a slowdown in consumer spending is evidence of the worsening outlook, and the implications for banks and other financial groups already under pressure from huge losses associated with subprime mortgages and their related securities.
Worries about consumer belt-tightening hit US stocks from across the board – from McDonald's to Tiffany & Co, the luxury jeweller which last week cut its profit forecast on weak consumer spending. The lower bonuses and rising unemployment on Wall Street is having an impact at the top end of the market. Mainstream retailers are under pressure, especially the second biggest mass discounter, Target.
Friday's 246 point plunge in the Dow wasn't a good omen for the start of trading here today. Nor is the fact that troubled banks Citigroup and Merrill Lynch report this week.
The Dow was off 1.92%, the Standard & Poor's 500 Index fell 19.31 points or 1.36% to 1,401.02 and Nasdaq dropped 48.58 points or 1.95% at 2,439.94.
American Express shares dropped more than 10% after the credit card company gave a profit warning. It was the steepest plunge in the company's shares since the first day the stock markets reopened following the September 11, 2001 attacks.
Shares of McDonald's skidded 6.6% and Tiffany shares shed 11.2%.
The warnings from Amex and Tiffany follow a warning from major credit card issuer, Capital One Financial, that its earnings would be hit by borrowers failing to repay debts.
Shares in MasterCard, the second- biggest credit-card network, lost ground for an eighth day on Friday, falling $US16.82 to $US179.17.
There are some very nervy investors in America at the moment.
Friday's Bank of America Corp deal to buy damaged mortgage lender Countrywide Financial Corp for $US4 billion in shares is now seen as averting one of the biggest collapses from the US housing crisis.
Before the deal was announced, Bank of America had a roughly $US1.3 billion paper loss on the $US2 billion it had already injected into Countrywide. The failure by Countrywide would have also imperiled around $US50 billion in funding advanced by the National Home Loan Board. It is a government group that has pumped an estimated $US750 billion into the US housing sector in the past year to try and maintain liquidity and deal flow as markets froze.
Elsewhere in the financial sector, fund manager, AllianceBernstein Holding LP shares dropped nearly 10% after revealing a fall in 2007 earnings per share, due in part to lower hedge fund fees.
Bloomberg says that most economists surveyed predict the US economy will avoid a recession. Growth will average 1.5% in the first six months of 2008, matching the fourth quarter's pace, according to the median estimate of economists. There was a 40% chance a recession would occur in the next year, according to the survey median.
Economists at Goldman Sachs Group Inc., Morgan Stanley and Merrill Lynch say differently and ha
