As stock prices fall, investors prepare for an autumn chill

In short, the ructions of early August—when Japan’s Topix index plunged by 20% in three trading days and tech stocks were in a tailspin after a lacklustre earnings season—were an increasingly distant memory. Was it all just a passing squall? The rapid recovery subsequently staged by the major share-price indices would certainly suggest so (see chart 1). But they do not quite tell the whole story. Look beneath them and a fundamental shift has taken place in the make-up of the market. Prior to the turbulence that began to emerge in mid-July, stocks had been on an astonishing run. America’s had risen during 28 out of the previous 37 weeks, their best streak in more than three decades, and plenty of others were also setting records with regularity. Now, and not merely because prices once again started sliding in recent days, the optimism that powered the boom seems to have ebbed away.