While Salkku Coincident Indicator was slightly negative, Salkku Leading Indicator for world markets was in positive reading in June 2025. Machine learning model based on Salkku leading indicator components is predicting a positive case scenario, which means positive returns for the global stock markets in next 12 months with 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 slightly negative readings in last few months, with current reading being -1.1 (Figure 1). This indicates that world business environment in aggregate has been under slight contraction.
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 positive outlook over the next 12 month period (Figure 2), with positive indicator reading of 0.17.
Model prediction
Global market outlook has improved significantly since last spring. Markets do not seem to have discounted any contraction in global economic activity. Instead those are developing very positively. Salkku indicators do not seem to suggest we are in a cyclical downturn, or one that is on it’s way. Machine learning model based on leading indicator components is predicting positive returns for the next 12 months with ~87 % probability.