World economic growth will struggle to accelerate this year as a U.S. expansion weakens, China's economy levels off and Europe's recession deepens, the International Monetary Fundsaid.

Global growth will be 3.1 percent this year, unchanged from the 2012 rate, and less than the 3.3 percent forecast in April, the Washington-based fund said today, trimming its prediction for this year a fifth consecutive time. The IMF reduced its 2013 projection for the U.S. to 1.7 percent growth from 1.9 percent in April, while next year's outlook was trimmed to 2.7 percent from 3 percent initially reported in April.

"Downside risks to global growth prospects still dominate," the IMF said in an update to its World Economic Outlook. It cited "the possibility of a longer growth slowdown in emerging market economies, especially given risks of lower potential growth, slowing credit, and possibly tighter financial conditions if the anticipated unwinding of monetary policy stimulus in the U.S. leads to sustained capital flow reversals."

The fund urged central banks in wealthy nations facing low inflation and economic slack to keep injecting stimulus until recovery is entrenched, saying rising longer-term interest rateshave hurt emerging markets the most. The developing economies need to be alert for financial risks if the "anticipated unwinding" of the U.S. Federal Reserve's bond-buying program reverses capital flows, the IMF said.

"The growth in the U.S. has slowed down, and they're catching up to that," Jay Bryson, a global economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said after the IMF released its report. "This is not the U.S. economy of the 1990s that was a locomotive for the rest of the world" though the U.S. remains "one of the primary engines of growth."

David Fuller's view Wall Street has seen a good recovery over the last three weeks, fuelled by money coming out of cash, bonds, and emerging markets. The appeal of US equities has been apparent for several years and is not difficult to appreciate. Here is a brief summary of America's advantages, frequently referred to by Fullermoney during the bull market to date:

1) The USA has a huge advantage in terms of competitive energy costs among large, developed economies, thanks to its invention and utilisation of fracking technologies, enabling it to tap its large reserves of shale gas and oil.

2) The success of fracking technology has helped to reinvigorate America's inventive, entrepreneurial culture, which is pulling away from other countries, in an era of exponential technological innovation, long forecast by Fullermoney.

3) The USA has the largest number of successful, multinational corporate Autonomies, by far. These leading firms have become increasingly powerful, despite the valuation contraction cycle often discussed by Fullermoney over the last dozen years.

These dynamic themes bode well for the longer term. However, the powerful additional stock market rally experienced by the USA and a number of other countries since mid-November 2012, increased valuations and led to overextensions relative to the trend means, approximated by 200-day moving averages, as you can see from the S&P 500 Index.

Currently, US indices are near their highs, at a time when a strengthening dollar, slowing global economy, and higher US taxes have reduced the growth rate in corporate profits. Nevertheless, global investors view the USA as a safe haven in an uncertain world that has seen Treasury bond yields rise in recent months.

America is somewhat safer for investors, despite an administration that is not known for its economic prowess. Among equities, favour relative strength, but watch out for overextensions relative to MAs, and expect some market turbulence over the medium term.