We've been looking at various surveys and market valuation-based statistics that have a track record of being able to generally get the direction of the U.S. economy right. Now we're going to take a look at a few indicators that get the direction of the global economy right. Toward the top of our list is copper prices.
Let's take a look at one kind of bond compared to another. Instead of the difference between the earnings of stocks and the interest rate (the way bond investors get paid) of treasury bonds, let's take a look at the difference between corporate bonds and treasuries.
Markets are future-oriented. That is to say that investors make buying decisions in light of expectations. One buys if one expects the investment to go up in value in the future. One sells if one expects the opposite. We've found two market indicators that are particularly good at capturing expectations of U.S. growth and one which is particularly good at forecasting global growth.