Given the rough start to the year in share markets, the attached note looks at past bear markets in Australian and US shares. The key points are as follows:
While share market corrections and even mild bear markets are common, long and deep bear markets invariably require a recession at least in the US.
Global and Australian shares have had a good rebound from their January lows but could still fall further in the short term as risks remain high around monetary tightening and geopolitical tensions.
However, a deep bear market is unlikely as a US, global and/or Australian recession are unlikely to be imminent.