In an April commentary about the wild gyrations in financial markets during the February to March phase of the Covid-19 pandemic, I noted that the behaviour of equity markets had been as bewildering, complex, and fascinating as ever. Still, I suspected that a weird logic was at work, and argued that markets might continue to rally despite the collapse of the world economy. And so they have. Will that change?

In my 40 years of observing and participating in financial markets, I have learned that August is always a month to watch. It is the harbinger of the northern hemisphere autumn - and, for what...