The stock market was happier yesterday, but it is having a jittery week.
This bout of nerves arose from - at any rate coincided with - a nasty reminder that interest rates can jump without the Bank of England, the American Fed, or that European Central Bank pulling any levers at all. Yields on ten-year US Treasuries leaped by 0.65 per cent in a matter of days - that is to say, their prices tumbled.
If you think that sounds rarified and distant from real life remember, the central banks have given up shifting their official rates by more than a quarter-point at a time, at intervals of a month or more and accompanied by lengthy, soul-searched explanations. The American bond market just pounced.
Yesterday it recovered a little. This could all turn out to be a flurry of midsummer madness. Don't bet on it, though.
At the very least, we have been warned that the era of dirt cheap money sluicing round the world in seemingly limitless quantities cannot last for ever - and it is this cheap money that is fuelling the boom in equities.
Companies borrow it to bid for each other and, when they cannot spot a bid target, to return cash to their shareholders. Julien Garran, Legal & General's strategist, reckons that US corporates alone returned nine per cent of their capital to shareholders last year and that the rate of share buy-backs has doubled in 2007.
Without the oxygen of these bids and buy-backs, you have to expect equities to take a breather, even if nothing else goes wrong.
It looks as if the world really is changing. We have had five-and-a-half years of unbroken global economic growth, the longest in all recorded economic history according to Larry Summers, the former US Treasury Secretary who went on to be president of Harvard. Arguably we owe it to an even longer, sustained fall in interest rates as measured by US Treasury yields. Mr Garran has a graph showing that a 20-year trend line was broken this week.
American bonds have been buoyed up because the Chinese - and others piling up colossal trade surpluses exporting to the States (and our good selves) - have recycled the proceeds into US Treasuries, lending it to the low-tax, highspending Bush administration.
Now there are signs they are having second thoughts. There is talk of buying outright the sources of some of the raw materials that China has to import in monstrous quantities just to keep going nowadays. Last week they even set aside a possibly experimental sackful of dollars to invest in a Blackstone private equity fund.
The Russians are deploying their new oil wealth at home. So increasingly are Middle Easterners - no gold Rollers in the desert this time.
Others are following the example of Norway, Singapore and Abu Dhabi with "sovereign wealth funds" for the benefit of future generations. Mr Garran counts seven of the world's ten main surplus countries now running such funds. It is all money destined to do something better than fund other people's share buy-backs.
