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The clues were there for those not dizzy with the sound of their retirement pots quickly filling up again. Even so, Thursday’s US payrolls number was a shocker. For the first time since the turning point in early March, investors are openly worried again that the darkest days may be ahead, not behind them. If trillions of dollars of stimulus spending and half a year of zero interest rates do not help, what will?

Confidence has been ebbing away since mid-June when most equity markets hit their 2009 peaks and bonds slumped to year lows. Some perspective is needed. The S&P 500 and the FTSE 100 indices are only 5 per cent off their highs. Emerging markets such as Brazil are down a tad more, Japan slightly less. The move in bonds is more telling. Given the feverish talk of inflation and sovereign downgrades in America for example, the 50 basis point fall in 10-year yields since June 10 must be a relief to policymakers. Yields on UK gilts of the same duration have dropped even further.

The third quarter will be a battleground. On one side, the “underlying” strength of the global economy remains weak. On the other, the full force of many stimulus measures are only now kicking in. Global banks will report another dazzling quarter. Even if economies stabilise and earnings do not disappoint, however, this could already be discounted. It is more likely to be disappointments, rather than positive surprises, that drive markets from here.

Finally, the decoupling theory has reignited. Chinese stocks hit their year’s high this week without a wobble. In fact, anything linked to China – from commodities to the Australian dollar – barely moved following the poor payrolls report. Another bubble may be building. It would be great if a billion Chinese all bought washing machines now that US consumers are burnt out. But the same promise was made two years ago, when Chinese equities were twice as high as they are today.

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