This week all the important macro releases came out with readings that were worst than expected.

Since early February, macro data has been missing expectations and we saw the effect earlier this year with a very weak GDP growth for the first quarter of only 1.9%

From then on things haven´t improved and Macro misses have continued. Leading indicators such as the ECRI Weekly Index or the CB Leading (rate of change) have turned negative.

ECRI co-founder Laksman Achuthan states that the recession has probably started but isn't evident at the moment. 

Watch interview here.

If we just take a look at this week's releases you will see the slowdown is occuring in different economic series.

The only sector that showing improvement as of late is the housing sector.

Right now all the focus is in Europe but I think the market isn't discounting the high probability that the US is entering recession.

This would have a large negative impact on the ongoing global economic slowdown (China and Brazil are already slowing down) and also into equity prices.

During the last few days, negative macro data has been ignored because the market is discounting that the FED will once again turn on the printing presses with a new Quantitative Easing program.

This will probably kick the can for a while and agressively lift stocks, however I think things will probably get uglier before the FED starts to intervene once again.

Keep a look out for macro. Contrary of one would think, macro surprises have actually led the equity markets, up or down, for the last three years.

Bestr regards,

                     Victor Riesco