The selloff in the Large Cap stock indexes in recent weeks coincided with mounting evidence of a global economic slowdown, which I have been monitoring since the start of the year. This development seems to have become of greater concern in recent weeks as the CRB raw industrials spot price index and the price of a barrel of Brent crude oil have dropped sharply. I combine these two into our Global Growth Barometer. Our GGB is down 13.7% since June 19 through Friday, to the lowest readings since June 28, 2012.
Some of the drop in our barometer is undoubtedly attributable to the strong dollar. In addition, the drop in crude oil prices reflects not only weakening oil demand but too much supply. Figures released on Friday showed OPEC had lifted output by 402,000 barrels a day in September to 30.47mbd--the biggest monthly increase in almost three years. So our GGB may be exaggerating the global slowdown.
Today's Morning Briefing: Behind the Curtain. (1) Curtain call. (2) Bad wizards. (3) Crisis of confidence. (4) More than just another dip? (5) Our Global Growth Barometer is taking a dive. (6) Strong dollar and too much oil supply may be exaggerating GGB’s drop. (7) Curtain raisers at the ECB, BOJ, and Fed. (8) Draghi says fixing economy isn’t his job. (9) Kuroda ready to buy more assets. (10) Fed’s “lift-off” may be delayed. (11) October selloffs can create opportunities. (12) More recession risks overseas than at home. (13) Risk off for now. (14) “The Judge” (+ +).
