Tuesday, October 21, 2008

A Macro View: Economic Weakness Themes Continue to Dominate

With economic growth waning in China and other emerging markets (top chart), demand for commodities has plunged (second chart), weighing on raw materials stocks (third chart). Meanwhile, in a world where USD and JPY are carry currencies amidst risk aversion, the U.S. dollar (bottom chart) continues to make new highs against a basket of world currencies. Those looking for a turnaround in stocks will want to also see an unwinding of these economic weakness themes, which we're not seeing yet.