This economic leading indicator* continues to decelerate. Again, our initial tip off was in July from my former associate’s timely email informing that Japan’s Mori Seiki was ‘blowin’ ’em out’, which in the machine tool industry is lingo for ‘get that crap off the floor even if it’s at a loss!’. What makes matters worse here is that these sales figures represent the number of unit sales, not the net value of those sales.
Here is the current situation updated (graphics from EDA, markups mine), showing the unwinding of the upturn that led the post-2012 market rally and economic recovery (such as it has been).
For reference, here is what the configuration looked like leading in to a little market event that you might remember.
* Speaking of traditional historical indicators. We can recall the stories that got promoted into the 2000 secular top trying to justify that it was just fine having a “new economy” because the old brick and mortar economy was being outsourced to China, Mexico, etc. So on the odd chance that it is not different this time (yup, sarcasm again) one might want to be aware what is going on beneath the surface of the Amazon/Google economy.
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