What Bad News? Markets Don't Seem to Care

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The global economy is once again showing signs of slowing yet global stock markets are back near their highs for the year on growing expectations the European Central Bank (ECB) will soon join other major central banks with a more expansionary monetary policy.

"This is going to become an asset 'grabathon', put your buying boots on," Bill Blain, a senior fixed income broker at Mint Partners told CNBC.com.

"Markets are dominated by central bank policies, low supply and strong demand and liquidity. It's about technical and not weak fundamentals. Everyone has watched Japan and in a zero inflation environment expects ECB to do same. It will be the biggest move we've seen in ages."

(Read More: ECB Rate Cut Could Bring Big 'Disappointment')

Expectations are growing that the ECB will cut rates at its next meeting on May 2. But asset manager Coutts went a step further on Wednesday, suggesting the ECB should go several steps further and roll out its unlimited bond buying program, which it announced last year.

"The ECB needs to take the theoretically unlimited commitment of its entire balance sheet, through its Outright Monetary Transactions (OMT) program, a step further by actively participating in credit markets to facilitate their functioning," to Norman Villamin, chief investment officer for Europe at Coutts said.

(Read More: Europe's TARP Moment Is Approaching: Coutts CIO)

In Europe, markets have also been buoyed by lower borrowing costs for many of the region's most troubled economies. Analysts have cited the massive increase in the Bank of Japan's quantitative easing program, which has driven yield-hungry investors to the bond markets of Spain and Italy. Plus, European policymakers have suggested in recent weeks that they will dial back their push for austerity and debt reduction and concentrate more on growth.

Still, for investors focused on macroeconomic data, there's plenty to be worried about after a slew of weak data in recent days, including worse than expected readings from purchasing managers' indexes (PMI) from China and Germany and a fall in U.S. durable goods orders.

(Read More: Germany's Ifo Drops in April, Raising Odds of ECB Cut)

"Bad news is good news for equities," Nick Verdi and Moyeen Islam, analysts at Barclays said in a research note Wednesday.

"The relatively strong performance of [global] equities is in stark contrast to increasing signs that the global real economy has slowed. According to our estimates, global manufacturing confidence may have declined further in April, accompanied by an unfavorable combination of higher finished goods inventories and weaker new orders."

Worst Is Over

Earlier this week, Goldman Sachs suggested things were actually looking up for the global economy.

"The risks we emphasized last month have played out to some extent with the haircut on deposits in Cyprus and weaker U.S. data, leaving less uncertainty going forward," Goldman analysts said in a research note.

The bank expects global growth to improve from 3 percent in 2012 to 3.2 percent in 2013 and to accelerate further to 4.1 percent in 2014. Goldman expects a weak patch for the U.S. because of "fiscal retrenchment" but then sees a reacceleration later in the year.

By CNBC.com's Matt Clinch; Follow him on Twitter @mattclinch81