GLOBAL MARKETS WEEKAHEAD-Investors wary, stocks at tipping point

By Natsuko Waki

LONDON, Aug 24 (Reuters) - With world stocks down 17 percent this year and the chances of breaking even in 2008 shrinking fast, investors will look this week to see if they hold above a key two-year low or subside further as global growth falters.

World stocks, measured by MSCI .MIWD00000PUS, hit their lowest level in almost two years last week as concerns intensified over the fate of U.S. mortgage firms and the health of major banks facing further asset-related writedowns.

In the case of Europe, if the market ends down on the month again, the pan-European FTSEurofirst 300 index .FTEU3 will have fallen for 9 out of the past 10 months.

Equity troubles come against a backdrop of sharp about turns in other major markets last week, that the next few days should demonstrate to be either renewed trends or mere blips.

What looked like an end to the sharp rally in oil and commodities might have proved a false dawn as crude oil jumped 6 percent last week and the Reuters-Jefferies CRB index of commodities futures .CRB making its biggest weekly gain since July 1975, feeding into inflation jitters.

And the dollar's August rally appeared to have lost momentum with the U.S. currency suffering its biggest one-day drop in five months against major currencies .DXY last Thursday.

Meanwhile, stock markets languish.

"Long-only equity managers are obviously struggling and they are in the red. You'd find it difficult to get back to the level pegging for the year," said Richard Batty, global investment strategist at Standard Life Investments in Edinburgh.

"We are fearful we are in a slow growth period ... That's why we favour cash and bonds over equities and property."

Earlier in August, oil's $30-plus tumble from its July record peak above $147 and a retreat in broader commodity prices had eased concerns over inflation, which discourage central banks from cutting interest rates to tackle economic slowdown.

This week's consumer inflation data from Germany, Italy and the United States might reflect some easing in price pressures.

U.S. GROWTH AND FED

Signs are afoot that some of the world's major economies may be in or close to recession -- technically defined as two consecutive quarters of negative growth. Japan and the euro zone's growth contracted in the second quarter, while the UK economy came to a standstill in the same period.

However, the United States is enjoying better growth than others, a factor which had triggered the dollar's rally earlier in August. Its Q2 growth is expected to be upgraded this week to 2.6 percent from 1.9 percent in the previous estimate.