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Thursday, July 5, 2012

Latest global data

I am not purposely looking for bad things to write about, honest.  There just is not anything really positive going on in the global economy.  Here is a look at some global PMI data.

That is a lot of countries in contraction in their manufacturing data.  There are also several more countries barely above the 50 mark.  With many of these numbers at new lows there is no sign of moderation in the slowdown yet.

Here is a look at the Global Leading Index (GLI.)

The momentum is still pointing down.  Nine of the 10 components weakened last month also indicating no moderation in the slowdown to be found.

Here is a look at the global PMI.

We are clearly well below last year's low.  This is raising the odds of a global recession taking hold.  This does not have enough data to say if we have reached the point of no return yet, but it could be very close.

Here is look at the 3 month % change chart.

The PMI output index is negative again for the fourth time on the chart.  The only time we did not go into recession in the prior 3 instances was in 2003.  That was a short term relapse after being in a shallow recession in 2001.  Many indexes retested their Oct. 2002 lows in a fairly sizable pullback.  However, the overall trend of the data was up at that point.  That is not the case today.  The data has really been trending down for two years.  The longer it stays negative the higher the odds of a global recession.  We can also see big drops in the Global industrial production in 2010 and twice in 2011 that coincided with big drops in SPY.  It is close to going negative again.  Until this data turns back up, the downside risk in SPY remains


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