Goldman Sachs is betting “Mr Market” is wrong in its recession warnings. While sliding stocks, declining long-term bond rates and higher credit yields are sounding the alert, the New York-based bank’s economics team, led by Jan Hatziusis, is more confident about the outlook for the developed world.

US petrol and heating oil futures gained and US treasuries also rose yesterday, as economic worries over Hurricane Sandy fuelled safe-haven buying in thin trading volume as the powerful storm began to batter the US east coast.

European stock markets dropped today after Japan’s Nikkei tumbled more than 11% overnight amid mounting anxiety that the world economy is plunging into a deep and protracted recession.