20180425-高盛-_Strong_but_Slowing__-_navigating_the_moderation_in_growth_16页_366kb

Global Markets Analyst: "Strong but Slowing" - Navigating the Moderation in Growth

Core Content

The document analyzes the "Strong but Slowing" phase of global economic growth and its impact on financial markets. It outlines historical patterns and provides strategic and tactical insights for investors during such periods.

Main Points

1. Understanding the "Strong but Slowing" Phase

• A "Strong but Slowing" phase occurs when growth rates are above recent averages but decelerating.
• Over the past 22 years, there have been 13 such episodes, averaging about once every two years.
• These phases typically last around 5 months and are characterized by a 1pp decline in global CAI momentum.
• Not all "Strong but Slowing" phases lead to recessions; only two of the 13 episodes evolved into contractions.

2. Market Behavior During Slowdowns

• Markets tend to experience drawdowns during slowdowns, with equities and credit underperforming.
• Fixed income and commodities usually outperform.
• The US Dollar tends to strengthen, while EM FX and EM local bonds show resilience.
• The drawdowns typically occur early in the slowdown cycle, lasting about 2 months, and markets often hover near the lows for up to 3 months.
• Risk-off behavior is common, with investors moving to safer assets like the USD and US Treasuries.

3. Tactical Investment Guidance

• The current slowdown is expected to be short-lived, with strong growth data anticipated in Q2.
• The drawdowns are more about risk premia and forward-looking growth concerns rather than a shift in growth expectations.
• EM assets, particularly EM FX and local bonds, tend to outperform DM during slowdowns, though not always.
• Tactical investors should consider market-neutral strategies due to lower Sharpe ratios during these phases.

4. Historical Context and Trends

• The slowdown in 2017 was the "softest" on record, with minimal drawdowns.
• Synchronous slowdowns (where growth deceleration is global) tend to be more severe for markets compared to asynchronous slowdowns (driven by specific regions).
• Inflation expectations often decline during slowdowns, aligning with the observed market behavior.
• Growth and earnings surprises are limited during slowdowns, indicating they are often "expected" rather than "surprising."

Key Information

• Global CAI data shows that ~60% of economies are currently in a "Strong but Slowing" phase.
• Equities and credit underperform during slowdowns, while fixed income and commodities tend to perform better.
• EM FX and EM local bonds are relatively resilient and can outperform DM counterparts.
• US rates historically decline during slowdowns, though exceptions exist (e.g., 2006).
• Drawdowns are typically around 1-2 standard deviations and occur early in the slowdown cycle.
• Market recovery is likely if growth data strengthens, rather than based on geopolitical risk reduction.
• Inflation expectations often fall during slowdowns, reflecting concerns over growth.
• Surprises in macro data are minimal, suggesting that slowdowns are not always unexpected.

Strategic and Tactical Outlook

• The report maintains a strategically positive view on global growth and risky assets for 2018.
• Tactical investors should focus on short-term opportunities, such as market-neutral strategies, and remain cautious about the potential for further growth deceleration.
• Emerging markets are expected to show more resilience than developed markets due to stronger growth dynamics.
• The 2017 slowdown was an exception, with limited market impact, suggesting that the current slowdown may not be as severe.