Every so often, it is worthwhile to step back and canvas the macroeconomic picture from a global perspective. Above are three charts that tell a distinctive macro story:
1) Deflationary pressures - In a world of expanding global economic growth, we would expect to see greater utilization of raw materials, driving the prices of commodities higher. What we've been seeing instead (top chart) is a collapse of commodity prices, particularly in the wake of concerns regarding growth in China. Over the past year, emerging market stocks have notably underperformed those of developed markets, just as periphery equity markets in Europe have underperformed core markets in response to concerns regarding Greece. One would like to see the emerging markets of the world as engines of growth, but instead the commodities markets suggest that those regions have become burdened by deflationary pressures, even as debt burdens have mounted.
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