Friday's disappointing results from GE , coupled with the worst University of Michigan consumer confidence index since March 1982, brought back fears that a U.S. recession will spread like wildfire around the world.
"I think we're in a bear market at the moment… we are advising clients to be careful," Philippe Gijsels, senior equity strategist at Fortis Bank, told "Squawk Box Europe".
The bear market's lows were reached in January and its highs in February, Robin Griffiths, technical strategist at Cazenove Capital, said. But this does not mean the bottom was reached, especially since the news flow will be busy in the following weeks.
"There's a greater risk we'll go back to the bottom of the trading range and test that again," Griffiths told "Squawk Box Europe".
Bracing for Earnings
With the earnings season just beginning, investors brace for more bad news, this time not only from the financial sector.
Philips Electronics reported a 28 percent drop in its first-quarter profit, a bigger drop than analysts expected.
Philips said it expected "some mature economies" to soften because of the global credit crisis and that its TV business will continue to feel margin pressure. Its shares fellmore than 3 percent.
The credit crunch will start to eat into earnings and the big question is how long the correction will last, Gijsels said.
"I think we've turned the corner and this quarter and the next quarter will become more visible that we've turned the corner," he added.
Volatility is still ahead, but in the longer-term things should quiet down, analysts said.
"Clearly even on a medium-term prospect we can expect that by the end of the year equities will recover," Patrick Jacq, bond strategist at BNP Paribas.
But the fact that G7 leaders urged banks to come clean about their assets sent another chill through the markets.
"Maybe this means that the worst has not yet been seen. Over the next few sessions, the environment will remain vulnerable," Jacq added.