'Stoned on free money': Wall Street is cautioning investors to beware of late-cycle risks around the world

Economists at HSBC used these two charts to illustrate the "global industrial downturn." Even as GDP estimates for the US and China — the two largest economies in the world — have held steady, areas like Europe and Latin America have declined.

Industrial output has slowed in most countries, HSBC said, with European industrial data notably weak.

Even as growth in the US decelerates, it's still above-trend, a team of strategists and economists at Deutsche Bank said in a report last week.

The firm referred to a broad indicator incorporating measures like lending standards, jobless claims, and surveys that have managed to hold up rather than dip into recessionary levels. Meanwhile, the likelihood of a recession in the EU is still relatively unlikely.

Although US economic data has remained stable relative to some developed market peers, there are glaring soft spots.

In a note distributed to clients Thursday, Joseph LaVorgna, chief economist for the Americas at Natixis, said the latest durable goods data "point to an economy that has rapidly lost steam."

He says the data is quite highly correlated to the business outlook survey conducted by the Federal Reserve Bank of Philadelphia — another withering key manufacturing data point.

"We see global growth slowing as the expansion enters its final stage," the BlackRock Investment Institute told clients in its January macro perspectives report. The slowdown comes as the US becomes a "drag rather than a driver" of growth.

The chart above shows the economy's output gap — the difference between what an economy is producing and what it actually has the capacity to produce — next to the stages of US business cycles back to 1965.

Naka Matsuzawa, the chief Japan rates strategist at Nomura, said in a report out during the final days of 2018 that the "global economy is already on an irreversible path to an economic downturn."

Still, his short-term outlook is less dire. He expects the global economy to recover, temporarily, in the second half of this year and into early 2020.