Listen, before we go through a litany of economic charts that pour some cold water on the recent bout of optimism regarding US economic growth prospects we want to stress that we don’t believe economic growth is about to fall off of a cliff.
Regardless of the series you use, the USD seems to have broken out of a 20-month trading range and is trading at the highest level in well over a decade.
More than one out of five developed market stocks and more than two out of five emerging market stocks are in a bear market (down over 20% from a high) in the past 200 days.
We all know that stocks are a leading indicator of economic growth and disappointingly recent breadth measures suggest that economic activity may slow over the next several months.
Back in September we explained how US treasury yields were at parity with foreign government bonds for many foreign investors (namely euro and yen-based investors) from a currency hedged basis.
General consensus seems to have quickly moved to a view that a Trump administration is going to be inflationary for the US and the global economy.
President-elect Trump appears to have won largely on the votes of the forgotten segments of our country who believe that they have been underserved by establishment politicians and gridlock. Despite the recovery from the financial crisis and a 15% increase in real GDP since the 2009 trough, large segments of the population feel that they have been left behind economically.
Investors love to toss around fundamental data points that are pretty meaningless without context.
Brazil’s trade data in October was abysmal. Exports fell 10.2% year-over-year to $13.721 billion and imports fell 15% year-over-year to $11.375 billion.
October was a pretty good month, all things considered, for economic data out of Europe. Industrial production out of Germany, Italy, France and for the Euro-Area aggregate all surprised to the upside.