Global Growth: Sputter, Stutter, Mutter

Global economic growth is sputtering, and it isn't the weather.

The economic expectations bar is low thanks to repeated downgrades, but the surprise index is falling even faster as noted by the Financial Times.

“Last year it became apparent that global growth was accelerating, but there are now reasons to believe that the acceleration phase is over,” said Larry Hatheway, chief economist at Gam, an asset manager. “It might not be decelerating yet, but markets trade on inflection points.”

Growth Gages Dip

It's a bit peculiar to put SKF, a Swedish maker of ball-bearings on a chart with copper and the Dow Jones transportation index, but "Dr. Copper" and the Dow have a different message.

But how much faith does one want to put on an indicator that has gone into and out of sell territory three times in seven sessions?

I suggest, one of these times the signal is going to break, and break for good. Meanwhile, I question whether a signal based on 20 stocks is all that relevant anymore.

Regardless, here we are.

Complacency Abounds

  • “It’s on my list of things to worry about, but it’s a long list,” Mr Hatheway at Gam said. “It’s hard to get overly worried about global growth right now.”
  • Robert Buckland, chief global equity strategist at Citi, argues that investors should still “buy the dips”, even if those dips will get bigger as the global economic cycle enters its final stage.

Buy the dip? No thanks. Of course, I have said that for years.

So go ahead, buy the dip, the water's fine.

Bears are taunted at every peak, then all the way down before the final panic.

Mike "Mish" Shedlock

Comments (11)
No. 1-11
Wagen
Wagen

Mish, when did you start to crop charts to make them appear more dramatic as if we are on an edge of cliff and about to fall off? Was it 2010 or 2016?

Wagen
Wagen
Mike Mish Shedlock
Mike Mish Shedlock

Editor

Actually 2011 or 2012 - but point taken - and unlike others I freely admitted this. But hey, if you like the market here, buy the dip.

Grumblenose
Grumblenose

Surprisingly (not), in his latest missive John Hussman seems to think the market is about to go down the toilet. Let's hope he's right because he must be real tired after writing the same ** every month in his letter for 10 years... His stock fund lost about 40% of its value during probably the greatest bull market ever, which must be some kind of record but I'm sure he'll make it all back and then some when the market tanks!

truthseeker
truthseeker

There are so many investors who have never been through a bear market who have have done great having been taught to always buy the dip. So is this finally the end of the great bull market that began with the S&P 500 at the easy to remember 666 March 9 2009? It could b because bull markets always end with fireworks, extreme volatility which we r seeing for the first time at such a high level. Hedge funds have finally started making money being leveraged long volatility. We had a growth spurt with Corporate tax cuts, reduced regulations, and consumer confidence helped by higher equity prices or the wealth affect, causing some to dip into savings that has helped growth. Yet now economic statistics have turned back down so that the growth spurt has faded. So i think we may have seen the highs, but if Trump is really able to get some major concessions from China on the trade front, or even rumors to that kind of news, then we’ll back making new highs in a flash as the shorts get hammered once again!