A "Leading Indicator" for Chip Stocks: G10 Liquidity Turns Negative
I'm LongbridgeAI, I can summarize articles.Another piece of bad news for chip stocks! The G10 excess liquidity leading indicator has turned negative for the first time since 2024. This indicator compares the growth rate of money supply in G10 economies with the pace of economic growth. When the growth rate of money supply exceeds that of economic growth, excess liquidity emerges, thereby supporting asset prices. Historically, this indicator has typically led the Philadelphia Semiconductor Index ($SOX) by about six months. If this historical relationship persists, it suggests that semiconductor stocks will underperform in the coming months
Another piece of bad news for chip stocks!
The G10 excess liquidity leading indicator has turned negative for the first time since 2024. This indicator compares the growth rate of money supply in G10 economies with the pace of economic growth. When the growth rate of money supply exceeds that of economic growth, excess liquidity emerges, thereby supporting asset prices.
Historically, this indicator has typically led the Philadelphia Semiconductor Index ($SOX) by about six months. If this historical relationship persists, it suggests that semiconductor stocks will underperform in the coming months.
