Global Growth Outlook Weakens

Tyler Durden's picture

Three weeks ago we noted that Goldman Sach's Global Leading Indicator (GLI) and its Swirlogram had entered a rather worrying contraction phase. Today's update to the June GLI data suggests things got worse and not better as momentum is now also dropping as well as the absolute level.

This continued deterioration in momentum suggests further softening in the global cyclical picture. Of particular concern is the broad-based deterioration in the GLI’s constituent components in June. 

Nine of ten components weakened last month, only the second time this has occurred since the depths of the recession in 2008Q4. The June Final GLI confirms the pronounced weakening in global activity in recent months. Goldman has found elsewhere (as we noted here) that this stage of the cycle, when momentum is negative and decelerating, is typically accompanied by deteriorating data and market weakness.


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ali-ali-al-qomfri's picture

hhhmmmmmm, mmhmmm judging by the EKG (Economic Krugman Guide)

acute mayocardial infarction,

who is this patient?

do they know how close to death they are?

The Monkey's picture

This is called increased upside for the market believe-it-or-not.

We have a deep retracement coming.

max2205's picture

Sooooo.....the fed has talked up the spx to the tune of 800 point above the 09 lows??!! Shocked

Snakeeyes's picture

All The Fed can do is create bubbles and even that is starting to lose its fizz. All Fed indicators are declining.

JackT's picture

Toilet is full, no one is flushing it

slewie the pi-rat's picture

looks like mom's recipe for making fudge brownies from scratch



Tuffmug's picture

Nothing massive Ctrl+P can't handle by rehypothecating and redistributing (a.k.a. stealing) the accumulated wealth of the world to create a simulacrum of actual growth and progress!

dexter bland's picture

There is too much focus on manufacturing in this index. 8 out of 10 components are manufacturing and/or export related, and none directly relevant to services - which is the biggest component of developed economies. Its seems obvious there is a glut of manufacturing capacity worldwide, perhaps due more to overly rapid supply growth in China and the developing world, than a lack of demand. Thankfully most developed economies are no longer  reliant on this sector. Even in China there is strong growth in the services sector as today's PMI shows, and meanwhile their industrial production continues to grow at a rate of 10% p.a.


chump666's picture

Bellwether meltdown via China (commodities) as Canada and Australia still playing the goverment bond re-flation RMBS conjob (housing), all the while...

* Australia May bldg approvals +27.3% m/m, +5.1% eyed, priv-sector houses +8.7%.

* Australia June RBA commodity price index -0.7% m/m, -10.5% y/y at 132.6.

lewy14's picture

Good data => Bullish.

Bad data => more CTRL-P => Bullish.

So, Bullish.

overmedicatedundersexed's picture

crime will save the world econ..drugs, finance,war for profit..that's the new econ of should be a criminal offence to not be criminal.