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

No. 1-11

China has put a skew on commodities, and the Transports are dominated by delivery services? The Chinese don't care about business cycles, the Belt and Road initiative is going ahead. If consumer export demand weakens they will redirect finance toward something else. More importantly manufacturing is transitioning away from human labor, you don't layoff a robot. It all seems to be ultimately deflationary, should the US adopt similar fascist economics we could speed up the process, and the final economic nirvana, no jobs, a living wage, $5000 houses and $500 cars. Well Hitler got in trouble when he tried to make everyone take a job in the factory, and with robotic workers he would have ruled the world.


Financial truth will also be an inflection point, as it was in 2000 and 2007.


“It might not be decelerating yet, but markets trade on inflection points.”“It might not be decelerating yet, but markets trade on inflection points.” Yes, the stock market rally began when the bankers were allowed by FASB, to lie about the value of their assets. Allowing financial fraud, was an inflection point.

Robin Banks
Robin Banks

Interesting that the surprise index has fallen when LIBOR rates have been on the up.

Mike Mish Shedlock
Mike Mish Shedlock


Keep the ball rollin'