Lombardi Publishing Corporation, a 28-year-old consumer publisher that has served over one million customers in 141 countries, is cautioning investors that too many economic indicators are pointing to weak global growth.
“The International Monetary Fund has lowered its growth forecast for the global economy, now projecting that the world economy will grow just 3.6% in 2014 and 3.9% in 2015. In 2013, it grew three percent,” says economist and lead contributor Michael Lombardi. “The International Monetary Fund’s forecast on global growth is far too optimistic; in fact, a large number of key indicators suggest economic demand in the global economy is close to outright collapsing.” (Source: “World Economic Outlook: April 2014,” International Monetary Fund web site, April 2014; http://www.imf.org/external/pubs/ft/weo/2014/01/pdf/text.pdf.)
According to Lombardi, one important indicator measuring the mood of the global economy is the Baltic Dry Index. The index, which tracks the global shipping prices of dry goods, has plunged more than 48% since the beginning of the year, pointing to slow growth. (Source: “$BDI,” StockCharts.com, April 21, 2014; http://stockcharts.com/h-sc/ui?s=%24BDI.)
“Manufacturing is another major economic indicator. If manufacturing activity increases, it means demand is increasing and that consumers are buying more,” he observes. “Unfortunately, global manufacturing is pointing to an economic slowdown. For example, in March, the JPMorgan Global Manufacturing Purchasing Managers Index declined to its lowest level in five months.” (Source: “J.P.Morgan Global Manufacturing PMI,” Markit.com, April 1, 2014; http://www.ism.ws/files/ISMReport/JPMorgan/JPMorganMfg040114.pdf.)
Lombardi notes that the eurozone is still in trouble and the European Central Bank is debating whether or not to follow the U.S. and initiate its own quantitative easing program. China, the world’s second-largest economy, is reporting weak economic data, as is Japan. And in the U.S., the stock market and economy are both flashing warning signs: corporate earnings growth is slowing, interest rates are on the rise, real incomes are declining, and consumer spending is soft.
“Investors shouldn’t take the global economic slowdown lightly; between 2009 and 2013, U.S. exports increased by about 50%, and roughly half of all S&P 500 companies derive sales from outside the U.S,” Lombardi concludes. “Any global economic slowdown would have a serious effect on U.S. growth.”
To learn more, visit Lombardi’s Profit Confidential web site at www.ProfitConfidential.com.
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, visit www.LombardiPublishing.com.
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