Something is changing in the global economy, according to two premier economic research groups. The leading economic indicators for both the Organisation for Economic Co-operation and Development (OECD) and Economic Cycle Research Institute (ECRI) are pointing to a coming economic slowdown.
First, the OECD leading economic indicators show that all five worldwide countries/regions show an economic slowdown coming in 2019, as each have fallen below a score of 100. Most fell below that critical 100 level sometime in the Spring of 2018, while the US was the last to drop below that level this past summer.
Next, the ECRI US Weekly Leading Index Growth Rate slipped into negative territory in October after falling for most of the year.
These developments also call into question the direction of interest rates and the stock market going into 2019. Will the U.S. stop raising interest rates sooner rather than later? Will Europe & Japan ever raise rates and begin to reverse their own stimulus programs? What impact will a slowing global economy have on corporate earnings and stock prices?
Bottom-line: This could be a perfect time to re-allocate to tactical strategies that can best manage risk during this critical market shift.