US companies had a strong run in earnings and revenue growth during 2018, with numbers largely surprising on the upside. A run like that looks unlikely in 2019, as the benefits of substantial fiscal stimulus from US tax cuts and greater public spending wane. US companies are already signalling that... Show More
There’s no question Australia’s economy has enjoyed a stellar run. The trouble is, it’s largely been a consumer-based, credit-fuelled growth story. And the Bank of International Settlements (BIS) reckons it could soon come to a shuddering halt. Show More
The latest hard data on global trade activity show a picture of volumes returning to trend growth. The chart below shows global container throughput activity and you can see a clear dip down in 2015/16: a sort of mini-recession or near-miss global recession as I've explained it previously. In any... Show More
The July round of flash manufacturing PMIs showed a slight but important rebound in the "global flash manufacturing PMI" (an indicator I put together based on the Markit readings). The global flash reading was up +0.4pts to 54.3 - the highest since February this year. While the move is not... Show More
In the latest edition of the Weekly Macro Themes report we looked at some surprising trends in global trade growth. I say surprising not because the improvement in global trade took me by surprise - our leading indicators clearly flagged it last year (when most people were very bearish on... Show More
Just wanted to quickly share this chart - it shows consumer sentiment across developed and emerging economies (GDP weighted) using the Reuters/Ipsos Consumer Sentiment Indexes. The chart (from my latest report) shows a clear trend towards new highs in consumer confidence for developed economies, and while emerging markets stumbled in... Show More
In this video I look at the latest data out of China, which shows an economic rebound gathering steam. I talk through how they got there, what's next, the implications, and risks to the outlook: Show More
I wanted to highlight this chart because the latest data basically makes it start to look like it's going against my previous thinking. The "flash global manufacturing PMI" which is an indicator I put together based on the flash readings of the Europe, US, and Japan manufacturing PMIs has weakened... Show More
The reaction of the markets was instructive on the day of the election results. Once the outcome was known, Asian and European markets placed their bets and markets sold off. By the end of the following day’s US trading, they were proved to be 100% incorrect. So even with a... Show More
The latest round of manufacturing PMIs confirm the signal previously flagged in the 2016 End of Year Special Edition of the Weekly Macro Themes http://www.topdowncharts.com/2016-special-edition that 2017 could see an upturn in global trade growth. If this does happen it will be against most people's expectations as political risks from... Show More
What started in January as mainly China-based worries has clearly broadened back out to concerns about global growth. At its core, there are five fault lines running through the global economy. The first is the malaise in emerging markets that began earlier this decade, with Brazil and Russia in recession.... Show More
The vast majority of financial crises have been preceded by the rapid accumulation of debt. For recent examples, we need only look back to the sub-prime housing crisis in the United States and European sovereign debt crisis. Perhaps the defining characteristics of the current cycle are the rapid build-up in... Show More
“Central banks are casinos. They print money as if they were manufacturing endless numbers of chips that they’ll never have to redeem. Actually a casino is an apt description for today’s global monetary policy. There is a well-known “foolproof” system in gambling circles that is sophisticatedly called the “Martingale.” Martingale... Show More
After several years of moderate but sustained worldwide GDP growth, the spectre of a global recession in 2016 can no longer be completely discounted. Brazil and Russia are already suffering from eviscerating economic down-turns and the growth rates of many other emerging economies, including China, have subsided to well below... Show More
Satyajit Das, the former economist turned consultant to Central Bankers says we better get used to a world with low growth. “Since the 1980’s growth has been driven by debt an financialisation. If you look at the growth in debt since the early 1990’s to 2008, only 15% of it... Show More
Philip Moffitt, GSAM’s Asia-Pacific head of fixed income says the Aussie dollar could rebound as the Federal Reserve holds off lifting interest rates and concerns about China subside. "We did interpret that decision in September as introducing something new, which was an eye on markets and risk assets. The Fed's... Show More
The trials of China and other emerging countries on top of the unresolved eurozone debt crisis, Japan’s inability to revive itself and the Federal Reserve’s likely imminent rate increase are fanning talk the world economy is headed for recession. The underlying concern is that policymakers can’t combat any slump as... Show More
A new paper that’s been released by Morgan Stanley “suggests that the greying population may reverse three long-term trends: 1) a decline in real (inflation-adjusted) interest rates, 2) a squeeze on real wages and 3) widening inequality. That is because those trends were driven by previous demographic shifts; first, the... Show More
"Zero bound interest rates destroy the savings function of capitalism, which is a necessary component of investment. Why that is true is not immediately apparent. If companies can borrow close to zero, why wouldn’t they invest the proceeds in the real economy? The evidence of recent years is that they... Show More
Mark Dow, the global macro hedge fund manager says “it’s going to be ok” and provides seven points to back up his reassuring words. Dow says 1) We’re more psychologically prepared for a Grexit than we were in 2010. 2) We’re now more financially prepared. 3) We’re more economically prepared.... Show More