Data due out around the world this week is unlikely to impress investors, with more New Zealand companies likely to disappoint and the United States benchmark share indices remaining under selling pressure.
The Economist Intelligence Unit said yesterday in a global outlook that the health of the global economy continued to worsen at an alarming rate.
The collapse in industrial production and trade volumes in December and January suggested that the deterioration was now synchronised across all regions.
Following the release of national accounts for the fourth quarter of 2008, the unit further downgraded its gross domestic product forecasts for the US, the euro zone and Japan to contractions of 2.5%, 2.9% and 5.5% respectively.
Japan and Germany experienced the steepest GDP contractions of the large developed world countries in October to December last year.
The White House said over the weekend that it did not favour nationalising US banks as a tool for repairing the damaged financial situation and helping reverse the global slowdown.
US bank stocks were sold off heavily on Friday (NZ time) on concerns the banks could be nationalised.
Even the White House assurance did not stop the fall in US share indices on Saturday (NZ time), with the Dow Jones Industrial Average closing at a six and a-half year low.
The Dow fell 1.3%, the broader Standard and Poor's was down 1.1%.
For the week, the Dow fell 6.2%, the S&P was down 6.9% and the technology rich Nasdaq was down 6.1%.
Crude oil prices fell below $US39 ($NZ76) on Saturday and gold pushed up through the $US1000-per-ounce ($NZ1960) barrier to reach a seven-month high.
In Europe, the FTSEurofirst 300 index of leading European shares hit a six-year low and the MSCI world equity index hit its weakest level since November 21.
Germany's upper house approved a 50 billion ($NZ128 billion) stimulus package to help it withstand its worse recession since World War 2.
New Zealand's listed companies are in the middle of their December result reporting period with analysts likely to look closely at the fortunes of Contact Energy when it releases its interim result tomorrow.
Forsyth Barr broker Peter Young forecast operating earnings to be down nearly 9% for the six months ended December compared with the previous corresponding period.
Profit after tax was expected to be down nearly 14% to $102.1 million.
The first half of 2009 was an extremely difficult trading period for Contact.
In the first two months of the half-year, limited water in the South Island hydro-electricity lakes resulted in Contact being short of generation capacity in the South Island and being forced to pay higher prices for its South Island load than it was receiving in the North Island.
"As a result, we expect the retail division to record less than 50% of the profit it achieved in the first half of 2008," he said.
