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Sometimes you get out on the wrong side of bed and everything that was peachy the day before suddenly looks rotten. Nor does it help when friends point out that nothing has really changed. So it seems with financial markets this week. After two months of leaping about in rose-tinted glasses, investors have turned gloomy again. Before Thursday’s mild advance, world stock markets had dropped four days in a row.

Why? Sure the latest US retail sales numbers were below consensus. But April’s month-on-month drop of just 0.1 per cent in core sales – which excludes autos, gasoline and food – would recently have been interpreted as bullish. March was down 1.2 per cent, after all, a sign the slowdown might be moderating. And yes, US mortgage applications fell last week. But they fell the week before too.

Global indicators are also being viewed through newly-darkened lenses. Rising commodity prices were once taken as a positive sign that a protracted slump had been avoided. Now oil at $60 is seen as a brake on consumption. Similarly, Tuesday’s data showed Chinese investment up by a third for the first four months of the year, versus 2008. But that is creating deflationary overcapacity, fear the newly-converted bears. Plummeting Asian exports are also now seen as worrying, rather than a hopeful indication that economies hitherto dependent on foreign demand are rebalancing themselves.

Inflection points always churn out mixed signals. After nine weeks of almost uninterrupted gains, which boosted world stock markets by 25 per cent and emerging stocks by twice that, a correction was also long overdue. Yet if more unambiguously bad numbers emerge, a nasty new consensus could soon build. The fundamentals do not look good: bank earnings can only be massaged for so long, while government handouts and ultra-low interest rates will not last forever. It is possible to put a positive spin on anything, as the recent comments of some central bankers have shown. Still, given their track record during this crisis, it’s no wonder investors are now in a funk.

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