Economy
Actual US growth is positive, but Chicago Fed and Conference Board leading indicators suggest weakening recovery. 5-year breakeven suggests inflation expectations are holding steady between 1.7% and 2%, falling slightly during the euro crisis. Citigroup economic surprise index shows positive surprises since the end of Feb.

Continuing weakness of leading indicators would give markets something to worry about. ISM headline numbers are good. The CB leading indicator this month is only the first negative reading — other indicators still show good growth with benign inflation and cheerfully surprising economic releases.

Liquidity
On the plus side, the Fed balance sheet is expanding, probably because of the USD swap lines reintroduced in response to the Euro crisis. On the minus side, BBB spread has had its biggest rise since it started falling in April 2009, BBG financial conditions index is falling (although much of that is probably down to falls in the equity market) and USD and GBP Libor and Euribor are rising and the TED spread is doing likewise. These negative signs are not enough to say that liquidity has fallen dramatically, but they may give an early indication of a turn in the tide.

Sentiment
AAII survey shows that small investors are becoming less bullish, but they are more neutral than negative on the stock market at present. This suggests there is scope for sentiment to get more negative. NYSE short interest ratio ticked down in April — a mildly bearish sign.

Earnings
Corporate earnings have been strong, with 80% upside surprises and 15% downside.

Conclusion
Compared to last time I blogged about the macro metrics, the picture has become more mixed, with a weaker showing for the leading economic indicators and for liquidity. Sentiment is not bearish enough to be a plus for the equity market. This could be a blip or a turning point, but I am not inclined to buy risk assets on the current dip.