News headlines have been way too negative. Here is from a recent BofA ML note sent to clients:

“We are in the midst of a synchronized global slowdown. Just take a look at what our economists from around the world have been writing:

– From India, “Poor IP: Worst over, but pain definitely left.”

– Hong Kong, “1Q GDP disappoints, downgrading 2012 GDP to 2.4%.”

– In China, “April credit and money data weaker than expected.”

– In Malaysia, “Slower IP Gains on Weak Manufacturing” and “Exports Stagnate”.

– In Taiwan, “Exports soften; inflation risk tempered by Ma’s new plan”.

– In Europe, “Rocky road ahead.”

– In LatAm, “Lower inflation pressures ahead.”

– In Australia, “Lowering our sights on Australian economic growth.”

The US is not immune to this global slowdown. This has been the most synchronized global cycle ever. If nations are subject to more global shocks, then economic conditions across countries will be more synchronized. The nature of the shock matters: Europe is a local shock that goes global.”

Source: BofA ML

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