Archive | May 1, 2024

MODELS: A leading indicator for U.S stocks

The most powerful leading indicators we have found for U.S stocks over the medium-term horizon are the net percentage of 39 OECD countries with rising leading economic indices (LEI’s) and the net percentage of 39 central banks that are easing rates. They achieve maximum correlation with the NYSE annual percentage change with 7 and 10 months lead respectively. If we aggregate these two, we derive a leading indicator for U.S stocks, with a 0.57 r-square to NYSE (pretty darn good […]

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