CHART OF THE DAY: The 'Paul McCulley' Indicator Softened For The First Time In 6 Months

The October durable goods orders report, which was released on Wednesday, was worrisome.

Nondefense capital goods orders excluding aircraft, aka core capex, unexpectedly fell by 1.2%. This was was much worse than the 0.8% increase expected by economists.

Core capex is a fancy way of saying business investment.

"Paul McCulley, the former legendary economist and fund manager at PIMCO, who was once being touted to join the Fed as a policymaker, told me...the YoY trend in the three-month moving average of core capex orders had for a long time been his preferred indicator of how the broader economy was going to fare a few quarters into the future," said economist David Rosenberg in a year-old research note.

While this indicator remains positive, it has decelerated.

"The 'Paul McCulley' indicator softened for the first time in six months to stand at 7% in October, down from 8.5% in September," said Rosenberg on Thursday.

"There is no denying that while the manufacturing survey data have been broadly decent, the actual monthly figures that feed into the capex part of GDP remain depressed ... one reason could be that much of the industrial strength is being concentrated in exports."