In the US, the ISM index (what used to be called the NAPM index) has had a very close correlation with economic activity over the last 75 years. Even though manufacturing is now just 12% of GDP, still, it is well correlated.
It fell, surprising the markets, in May. What's happening seems clear enough to me. The economy had finally started to accelerate into a sustained economic recovery. And then the "fiscal cliff" started to bite, and it slowed again. This dynamic has played out again and again over the last 5 years, right across the world. Fiscal tightening causes economic slowdown. Is anybody listening?
QE is safe. But the share market may not be -- the market is well correlated to economic "surprises" (i.e., what surprises the assembled gurus en masse) And the surprises have all been negative over the recent period.
Disclaimer. After nearly 40 years managing money for some of the largest life offices and investment managers in the world, I think I have something to offer. These days I'm retired, and I can't by law give you advice. While I do make mistakes, I try hard to do my analysis thoroughly, and to make sure my data are correct (old habits die hard!) Also, don't ask me why I called it "Volewica". It's too late, now.
BTW, clicking on most charts will produce the original-sized, i.e., bigger version.