Two-thirds into the reporting season in the US, earnings have contracted for the first time since the start of the recovery three years ago, points out Collins Stewart Wealth Management.

The aggregate total so far stands at a decline of 0.7 per cent, with 180 out of 500 companies still to report.

This is potentially worrying as many equity investors have pointed to robust company earnings in the past year as a counter-argument to the uncertainties on the macro outlook.

In an investment note for August, the UK's Collins Stewart also highlights the falling number of companies having their earnings estimate revised upwards, which the wealth manager sees as a timely indicator of falling share prices.

With macroeconomic headwinds, an analysis made by the firm suggests that earnings growth will continue to slow significantly, by between 4 and 5 per cent below what research analysts are currently predicting.

Beyond earnings, Collins Stewart believes that policymakers have performed disappointingly as well. In its global strategy report, it writes that Mario Draghi, the president of the European Central Bank, has proven to be as "guilefully prolix" as his predecessor, Jean-Claude Trichet.

Many investors have waited for Draghi to turn the ECB into a more dynamic institution with powers to intervene in bond markets, but he has not managed to increase its mandate.

"Markets have continued to chart their perverse, asymmetric course, buying bad news, unsure what to do with the good, confident those policymakers’ hands will be forced," Collins Stewart said. "But yesterday, as the market realized that Mario Draghi was announcing nothing new, the FTSE dropped 100 points in a matter of minutes."

To add to the bad news, the wealth manager noted that German manufacturing PMI has tumbled to 43, where 50 is the boom/bust threshold, and that UK GDP registered a 0.7 per cent contraction in the second quarter of the year.