What’s Really Happening and How to Protect Your Portfolio Last Updated: October 27, 2025 (Day 24 of shutdown) The Bottom Line Up Front What you need to know in 60 seconds: The government shutdown is now in its 24th day, and it’s different from past shutdowns in one critical way: Food stamp benefits (SNAP) will stop for 42 million Americans starting November 1st. This creates a $12 billion hole in consumer spending every month it continues. Our best estimate: The […]

Executive Summary As the US government shutdown enters its 24th day, fund managers require a sophisticated analytical framework that properly identifies the primary market drivers. This analysis employs a hybrid approach: a 2×3 matrix capturing independent variables (duration × workforce impact), dynamic decision-tree triggers for tactical rebalancing, and regime-change assessment for strategic positioning. Critical Insight on Causality: The primary equity market risk is not the 5,000-15,000 federal layoffs themselves (only 0.01% of total employment), but rather the SNAP (Supplemental Nutrition […]

1.Introduction In the three days following President Donald Trump’s announcement of sweeping tariffs on April 2, 2025, dubbed “Liberation Day,” the U.S. stock market experienced a dramatic downturn, often referred to as the “Trump Tariff Tantrum.” (TTT) The Dow Jones Industrial Average plummeted over 2,200 points, with the S&P 500 dropping nearly 5% and the Nasdaq falling close to 6% by April 4, erasing post-election gains and wiping out an estimated $5-6.4 trillion in market value. The tariffs, including a […]

Economic Wrap is a quarterly series aimed at taking an objective, evidence-based balanced view snapshot of the US and Global economies – which of course has major implications on all stock markets. It references publicly available data at the time as well as more advanced or sophisticated proprietary models from RecessionALERT that are not publicly available. In summary, the analysis below provides an evidence-based analysis of the U.S. and global economies, highlighting a complex outlook. The U.S. labor market remains […]

Introduction The U.S. economy is highly interconnected with global markets, geopolitical events, and domestic policies. A variety of risks—ranging from international conflicts to domestic policy missteps—could negatively impact economic growth, potentially triggering a recession. Below is an analysis of the top geopolitical risks that could negatively impact the US economy and potentially lead to a recession. Each risk includes an estimated likelyhood of occurrence, potential unfolding of negative outcomes, GDP impact, estimated S&P 500 downside, key stock sectors affected, recession […]

Global Slowdown? What Global Slowdown? We can’t see it. Maybe we are blind. Total world economic activity as measured from the average of world trade volumes and industrial production, saw a soft landing but is clearly on an upward trajectory: World trade volumes (average of imports and exports) in particular are showing strong growth, emerging convincingly from its recent trough: The % of OECD countries with a positive rolling four-quarter cumulative GDP is back up to 75% having posted its […]

The official data the National Bureau of Economic Research (the arbiters of U.S recession declarations, also known as NBER) are looking at to determine the coincident (current) status of the U.S economy, shows the economy may be slowing, but its not down or even OUT yet: It is hard to imagine the FED are not taking guidance from this either when pondering rate cuts. Looking at the the month-on-month growth index that the headline index is created from with a […]

Composites created from U.S geography limited internet searches for 8 search-terms we have found most aligned to uncertainty and fear regarding personal finances, the stock market and the economy have bottomed and appear to be on the rise: Both the equal-weighted composite and our preferred measure, the “search-volume weighted” composite bottomed in January 2024. This latter measure weighs each search term by the actual number of searches measured for the month as opposed to using the “relative to its history” […]

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 […]

NOTE : this is a very simplistic thought experiment, as determining recessions are usually much more multidimensional , nuanced affairs. Its also debatable whether deficits do indeed artificially prop up the economy or not, or even if they are bad or not. There are also potential multiplier effects with budget deficits that are not taken into account with this simple thought experiment. The current federal budget deficit as % of GDP is at “war-time levels” last seen in WW2 The […]

Background The Gen2 probability model we maintain for PRO subscribers for the SP500 provides for short, medium, long-term and macro-term probabilities of market troughs/peaks. It does this by examining current up/down trends across the 4 time-horizons mentioned and compares them to a 30-year historical record of said trends with regards to both duration of trend and gains/losses achieved for the trends. By comparing the duration and gain/loss of the current up/down trend with the historical record, we can impute two […]

Despite all the traditional leading indicators warning of recession for some time now, the US economy seems “robust” with unemployment stubbornly making new lows. We touched on the suspected reasons for this in our public note “The Delayed Recession” which offers the most plausible reasoning for this. However, if we dig a little deeper under the hood, the goldilocks situation may be coming to an end. 1. The Global Economy The U.S economy is no island, with a substantial portion […]

The U.S. Bureau of Labor Statistics announced a short while back that US national unemployment rate was 3.8% in August and September, versus the lows of 3.4% witnessed in both January and April 2023. On the surface, the employment situation looks healthy. Against the backdrop of virtually every leading indicator warning of recession (for quite some time now we must add), employment appears to be “the last man standing”: The national unemployment rate in the United States is skewed by […]