Société Générale’s key strategist, Albert Edwards, has warned of an impending bloodbath in stock markets. October is a traditional month for share crashes.

He said: “Equity investors are in for a rude shock. The global economy is sliding back into recession and they are still not even aware that these events will trigger another leg down in valuations, the third major bear market since the equity valuation bubble burst.”

Edwards went on to say: “So far the equity market has shrugged off much of the weaker data that abounds, and has not joined the bond market in a perceptive move. The equity market will though crumble like the house of cards it is, when the [US] manufacturing ISM slides below 50 into recession territory in coming months.”

We are, he said, about to witness a “valuation nadir last seen in 1982.”