Breaking Bad

With earnings season underway, perhaps pulling back to 30,000 feet is worthwhile to glance at the macro environment that is backing these new all-time high nominal stock prices. These six charts say it all...

Macro-economic data (levels and beats/misses) have rolled over after looking like it was different this time...

 

And all three global risk factors are becoming increasingly worrisome - from US growth, European 'risk', and China growth...

 

The business cycle has turned into slowdown...

as Global PMIs and Goldman's Leading Indicator roll over...

 

but, of course, stocks continue to levitate. It is worth noting the last time the difference between a 'macro-based' S&P and the market was this big was the nonchanlence leading into the debt-ceiling debacle in 2011...

 

and it would seem DM markets are more than due to realize these disappointments...

 

Charts: Goldman Sachs and Morgan Stanley

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