Markets this week: Gloom, doom and a little bit of sunshine

In the never-ending battle between the bulls and the bears, bears are clearly wining right now and not without a reason.

The week, which started off with a first-ever downgrade of the world's top economy, has been nothing short of a nightmare for investors. European debt problems and an ever-weakening economic outlook have all contributed to the wild market swings.

However, US stocks shot up 4% yesterday , as bargain-hungry investors overcame the recent wave of fear that drove selling over the last two weeks.

The worry is more from the economic slowdown that we are looking at in US and the debt crisis in Europe, explained Jyoti Vaswani, CIO and Director Fund Management of Aviva India. "The reaction of the market has been more towards the expected slowdown [than the downgrade itself] that we are expecting," she said.

Meanwhile, Ruchir Sharma, global head of emerging markets at Morgan Stanley Investment Management sees the US economy slipping in and out of recession in the next few quarters, with global equities following the relapse pattern. Catch the full interview: Here

The United States faces one-in-four odds of slipping back into recession, and a weaker economic outlook is raising the likelihood the Federal Reserve will soon do more to boost growth, a Reuters poll shows.