One of our favorite indicators of leading "global growth" is the Goldman swirlogram released each month, for two reasons: i) it succinctly summarizes on one chart what the near-term state of the global economy is, and ii) it is rather silly. Regardless of ii), the methodology does look at the entire assortment of available global leading indicators (which in the case of the US isn't saying much(, to determine the current state of the world economy. According to the just released update, as a result of a plunge in leading indicator acceleration, the world has just had its most slowdown-y month in the past year.
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And Goldman's assessment.
- The October Advanced GLI places the global industrial cycle further in the ‘Slowdown’ phase, characterised by positive but decreasing Momentum. This phase is generally less supportive for risky assets than ‘Expansion’.
This should explain why risky assets just hit a new all time high.
- The October Advanced reading gives further evidence of a moderation in the global data, following continued improvement over the last few months. Although we would view a stabilisation at current levels as positive, a sustained deceleration from here would be potentially worrisome.
Nothing better than potentially worrisome: it means the Fed will soon be monetizing REITS, ETFs (like the BOJ), student loans, wheelbarrows, and everything else not nailed down. Bullish.