Macroeconomic Track

I just had a look at the daily up-date of the indicator-system introduced in 1. Let me try to distill the main findings out of the bunch of results.

1 INDPRO

First we obtain the four indicator-designs for INDPRO (industrial production index)

All_indictors_IPI

Design 1 (red line) is lagging, designs 2 and 3 (green/blue) are coincident, design 4 (brown) is leading.

  • The quarter-to-quarter designs (q-t-q: red/blue) are still sloping down (which means a deceleration of the INDPRO series).
  • The month-to-month indicators (m-t-m: green/brown) seem to stabilize (on somehow lower levels):
    • the gap between red and green (growth q-t-q vs. growth m-t-m) is narrowing
    • the gap between blue and brown (cycle q-t-q vs. cycle m-t-m) is closing.
    • Typically, at the onset of a recession, one expects the above gaps to spread, instead.

This figure suggests that the recent systematic decline observed in the INDPRO-series ( starting somewehere in mid 2015) might come to a due end.

2. GDP

And now for the GDP-system:

All_indicators_GDP

In contrast to INDPRO, the GDP-indicators are still marking a pronounced deceleration; but levels are higher/positive: the growth-designs (red/green) are still firmly positive; both cycle-designs (blue brown) entered negative territory, though.

3. Summary

Squeezing out the above mixed-bag:

  • imminent recession unlikely (GDP is decelerating but growth is still positive)
  • evidences for a stabilization of the recent INDPRO-dynamics (end of deceleration)

Investment tip? The share of risky assets in my portfolio slowly increases; the first time since almost two months.

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