Goldman's Global Leading Indicator Drops In June
Goldman's June Final GLI came in at 3.1% year-over-year, down from the revised 3.3% year-over-year reading in May. Momentum came in at 0.15% month-over-month - flat from last month’s revised reading. Ever optimistic, Goldman views this results, as continuing to locate the global industrial cycle close to the ‘Expansion’ phase but has yet to signal positive acceleration... oh so close... The 3 big drivers of the deterioration were Japan's Inventory/Sales ratio worsened, US Initial Jobless Claims were marginally higher, and as we have been vociferously noting, The Baltic Dry Index continued to come in softer as well.
US data, they argue, has been improving (though we note US Macro surprises at 2-month lows), but improvement has yet to show up in a more convincing way in the broader, global dataset.
Despite all this disappointment, Goldman remains resolute (just like they were on Q1 GDP til they folded... and Q2 GDP)...
Still, we continue to expect the GLI to move into ‘Expansion’, in line with our optimistic outlook for US growth, and we will be watching the GLI closely in the next few months for signs of a more broad-based turn in global activity data.
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