Even as left tail risks to US and global economic growth seem to have been mitigated over recent weeks (more accommodate financial conditions, rising of some PMI data, worst case trade outcome seemingly a lower probability now), incoming data continue to suggest the nadir of this slowdown cycle has not yet been reached. This is of importance since many measures of stock market exuberance seem to be simultaneously elevated (elevated RSI, lack of put option buying, etc). Thus, there remains the possibility that stocks in particular are susceptible to a re-calibration of economic growth/earnings expectations.

Take, for example, leading indicators produced by the Conference Board and OECD in charts one and two. The Conference Board United States LEI remains in a downtrend and is pointing to basically zero growth. The OECD global LEI just made a new lower low to a level not seen since 2009.