Both Salkku Coincident and Leading Indicators for world markets were in neutral readings in November. A model based on Salkku Leading Indicator components is predicting positive returns for the next 12 months with fairly high probability.
Salkku Coincident Indicator for world markets
A coincident indicator is an indicator which tells us how the economy is doing right now. We look at changes in Composite Global PMI readings to gauge the development over past few months.
Salkku Coincident Indicator has shown neutral readings in last few months (Figure 1). This indicates that world business environment in aggregate has not experienced any major shocks, which would impair growth, and enterprise outlook is cautiously optimistic with slightly negative indicator reading of -0.4.
Salkku Leading Indicator for world markets
Salkku Leading Indicator for world markets is a collection of individual indicators, which has in the past best predicted world market growth in 12 month period. Currently we are including inflation data, and liquidity levels in the leading indicator for world markets.
Salkku Leading Indicator for world stock markets indicate neutral outlook over the next 12 month period (Figure 2), with slightly positive indicator reading of 0.17.
Model prediction
Machine learning model based on leading indicator components is predicting positive returns for the next 12 months with 70.6% probability.