Stay vigilant but calm

Economy still strong

If you define it as a 20% fall from highs, a bear market has emerged in the emerging markets (in US dollar terms) - but Europe is not quite there and everywhere else has so far seen a relatively modest correction.

Back in February, concerns about US inflation triggered a technical sell-off where the S&P 500 index fell by 10%. After falling now for five sessions in a row, the US is just 5% off its recent high. But the magnitude of some individual stock declines has spooked some investors so it is worthy of comment. We have had several pullbacks in the past ten years since the financial crisis - all have been in some way justifiable and have left investors feeling bruised and nervous. But markets by their nature settle down to find an equilibrium where the positive and negative forces are back in...