DOES the improvement in financial markets over the past two weeks indicate that fears of recession have abated?
This is a hotly debated topic at the moment, with investment guru Jim Rogers being the latest to join the chorus of voices on the possibility of a US recession within a year.
However, most Wall Street economists see a much smaller chance of a US recession within this span, with odds typically below 33 per cent, said Bloomberg.
"There are still key concerns of prolonged sluggish global economic growth,'' said Vincent Khoo, head of research, UOB Kay Hian.
Fears of recession may have eased but that doesn't mean the risks have disappeared.
"While the economic numbers from December to February did give a scare, we still held onto our view that the US economy will continue growing in 2016.
"We still see low probability of a US recession this year but can only confirm by mid-March,'' said Chris Eng, head of research, Etiqa Insurance & Takaful.
In the meantime, Eng expects the markets to continue their uptrend at least until the European Central Bank meets on March 10.
Fears of recession may have receded but not the reality.
"In Malaysia, the reduction in statutory reserve requirement (SRR), the interest-free money banks park with Bank Negara, has helped; it was no coincidence that foreign funds began to flow again the moment our SRR was reduced.
"It will be the same for China which recently lowered its reserve requirement,'' said Pong Teng Siew, head of research, Inter-Pacific Securities.
Pointing to rising risks, Pong said investors were flooding the junk bond market again even though the corporate default rates are higher than those of the Lehman levels. "Liquidity is papering over rising risks again.
"Once the flow of liquidity slows again, there will be problems,'' said Pong.
Market sentiment has improved due to the uptrend in commodity prices, said Danny Wong, chief executive officer of Areca Capital.
"However, in the immediate term, the market may not surge too high from here; it will probably remain rangebound unless oil and crude palm oil prices continue heading north,'' said Wong, adding that US data must also reveal less chance of a recession.
The risk remains despite improvement in sentiment that was data and event-driven, saqid Suhaimi Ilias, group chief economist, Maybank Investment Bank.
For example, a pick-up in US retail sales in December 2015 and January 2016, alluding to a sustained growth momentum in the US; improving crude oil price giving the impression of a pick-up in global demand although that could be seasonal, besides the attempt to curb output growth by several Opec and non-Opec major producers as well as policy moves by major and regional central banks to spur demand via cuts - even negative - interest rates and reserve ratios.
"It may be more of slower growth rather than outright contraction in world GDP.
There are excesses in terms of capacities, inventories and debt that are curbing growth as these are not sustainable and must be corrected first,'' said Suhaimi.
The global economy is still at risk and after seven years from the 2008-09 global recession, a return to a sustainable and synchronized global expansion still remains elusive, said independent economist Lee Heng Guie.
"Global growth, trade and investment are weak.
"The US economy is coming along quite decently but concerns remain about the pace of growth in Japan and the Eurozone.
"The troubling economic picture in China is also unsettling investors.
"With so many conflicting signals and disturbing news flow, it is no surprise to see that the market sometimes behaves irrationally and sometimes rationally.
"Ultimately, the fundamentals of the real economy and corporate earnings have to catch up with the stimulus measures to create real growth and demand,'' said Lee.
Lee's reminder is that the real economy has always lagged the market.
The stock market offers its predictions and, occasionally, it is proven right.
As the Nobel-prize-winning economist Paul Samuelson once put it: "The stock market has called nine of the last five recessions."
Globally, the jitters are still there, said Nor Zahidi Alias, chief economist, Malaysian Rating Corporation.
Movements in equities and financial markest in general do not necessarily reflect economic fundamentals, although they are commonly used as leading indicators for the economy.
"Concerns over a possibility of economic hard-landing in China are still on the back of investors' minds as policymakers struggle to find a more balanced approach to support the economy without creating more financial imbalances.
"The crude oil market remains another worry although I personally think the market is overdone, judging from fundamental and technical aspects.
"This does not mean prices will not weaken from current levels. In fact, its volatility will still keep many investors on the sidelines.
"From a longer term perspective, the current low prices look rather unsustainable,'' said Zahidi.
Politics is another factor that keeps pounding on the equity and bond markets.
Rising populist movements - as evidenced by the popularity of presidential candidates - Donald Trump in the US and Marine Le Pen in France - raise the prospects of an abrupt change in foreign policies, which of course, does not augur well for global sentiment, at this juncture.
As for Malaysia, said Zahidi, its macro performance this year will be largely determined by the external sector, particularly the crude oil market which, if it improves in the second half, will change the overall sentiment.
The Malaysian economy was mainly supported by private consumption last year which contributed about 63 per cent of the headline growth in 2015; this pillar will likely weaken this year as consumers remain extra cautious on discretionary spending.
Therefore, a recovery in the external sector - especially in prices of crude oil and palm oil - will support Malaysia's economic headline growth in 2016, said Zahidi.