Downward revisions to previously 'hopeful' levels for Goldman's Global Leading Indicator (GLI) suggest a significantly softer patch for global activity consistent with subdued growth in the near-term. The GLI has now been in 'slowdown' phase for four consecutive months and while it has not reached the 'contraction' phase yet, empirical results show this phase far less supportive of risk-assets than the current exuberance suggests. With Korean Exports, Global PMIs, and Industrial Metals all disappointing, the most concerning aspect is Goldman's three-key-risks (US growth, Euro 'risk', and China growth) have all upticked significantly in recent weeks after consistently falling all year. As the Swirlogram below indicates [6], the 'Slowdown' is deepening.
The Swirlogram has spoken [6]...
[7]
and at the same time, the big three risks are coming back to life once again...
[8]
but US stocks are outperforming their typical slowdown phase performance... even as EM stocks, World Growth stocks, Oil, and Copper all drastically underperform...
[9]
Charts: Goldman Sachs