On the face of it, the stock market seems to be drifting lower based on military tensions and geopolitical concerns involving the Middle East and Russia.
But analysts increasingly are asking whether there's something more troubling underlying the global economy.
"Geopolitical concerns have been driving recent market moves, but is something bigger underway in the stock market?" Bank of America Merrill Lynch strategists Martin Mauro and Cheryl Rowan said in a report to their clients Tuesday.
Mauro and Rowan note that "the average Wall Street firm is recommending the lowest allocation to stocks in over a year, with a more bearish position than during the depths of the financial crisis."
Professional investors are especially gloomy about Europe, where recent economic data have startled analysts because they are so weak; even for Germany, typically the European powerhouse. Some analysts expect Germany's gross domestic product release this week to show a decline in growth.
Europe went through a debt crisis and recession in 2011 through 2013, and the concern is that it could be headed into distress again.
"Trend growth in the euro area is perilously low, and vulnerable to even slight setbacks in sentiment," said eurozone economist Claus Vistesen, of Pantheon Macroeconomics.
He noted in a report that Spain's unemployment of 24.5 percent in June "remains alarmingly high." And in the banking system, "the level of delinquent loans is also stubbornly high and has refused to come down despite stronger growth in the past 12 months."
Italy last week fell back into recession for the third time, and analysts are questioning whether investors will become concerned — as they were a couple of years ago — about Italy's ability to cover its debts when growth is so stunted.
Now, however, global fund managers are becoming nervous again, although bond yields are not reflecting angst.
In a survey of global fund managers by Bank of America Merrill Lynch, the global fund managers said they'd cut back on European stocks to the lowest level in three years, and especially European banks.
The managers were holding more protection than at any time since the financial crisis, to moderate the effect of a sharp stock market decline. Typically, when professionals are that worried about the future, it's a sign that the opposite will happen and stocks will rise in the months ahead, noted Mauro and Rowan.
But that depends on whether investors are overly skeptical.
In Germany on Tuesday, a well-known survey of investor sentiment, the ZEW, plunged to a level far below expectations.
"Some drop in investor sentiment was expected given ongoing tensions with Russia, recent poor economic data and weaker equities so far this month, but it was larger than anticipated, reinforcing the picture of downside risk to the economy," Vistesen said.
When the outlook is negative, companies tend to be cautious about hiring and spending on business expansion, and that can hold the economy back. A weak Europe also has implications for U.S. companies because about 20 percent of their exports go to Europe.
"There is a real and growing danger that the eurozone enters a Japanese-style bout of flat or falling prices," Capital Economics economist Julian Jessop said in a report.
Recently, the European Central Bank warned that geopolitical risks could be detrimental for Europe's economy. And the International Monetary Fund lowered its outlook for the global economy, including the U.S.
The IMF is expecting the world's economy to grow just 3.4 percent this year, compared with the 3.7 percent it had estimated a few months ago. And the U.S. is forecast to grow just 1.7 percent, the slowest growth since it was coming out of the 2009 recession.
Despite significant optimism by some analysts lately, Federal Reserve Vice Chairman Stanley Fischer said in a speech this week that while the recovery has been "steady," there has been an "unspectacular climb in global growth since the financial crisis."
Forecasts have repeatedly been too optimistic, he said. "Year after year, we have had to explain from midyear on why the global growth rate has been lower than predicted."
In the U.S., he noted, the housing sector "continues to weigh on the recovery." And "weaker economic conditions in Europe and other parts of the world have weighed on U.S. exports and corporate earnings."