With US Macro no longer the clean dirty shirt, [7] the 'hope' of a recovery from the Spring swoon has faded rather quickly according to Goldman's latest Global Leading Indicator (though obviously not David Kostin [8]). The modest April pick up - driven mainly by sentiment indicators as opposed to hard data - has faded as the reality of economic deterioration was more pronounced as both the Philadelphia Fed headline and the New Orders less Inventories components (the advanced proxies for Goldman's Global PMI aggregate) fell to the lowest level in more than six months. The S&P GSCI Industrial Metals Index also made new lows and fell for the third month in a row. The CAD and AUD TWI Aggregates weakened, driven primarily by a weaker AUD, and US Initial Claims also worsened from last month. But apart from that... as Goldman notes, the decline in momentum was a bit more substantial in May than many had expected.
Goldman's Leading Indicator momentum (blue) suggests global industrial production's short-term pick up will fade rapidly...
[9]
as the Swirlogram indicates a deepening slowdown...
[10]
Of course, none of this matters, as the bank's 1750 PT for year-end S&P 500 seems to believe that H2 will be all good...
Charts: Goldman Sachs