The U.S Monthly Leading Economic Index (USMLEI) PDF report for October 2022 has just been published in Reports Centre. The USMLEI plunged in October from -9.3 to -19.7, printing its 4th negative print. The USSHORT (short leading index) went from +5.1 to -7.4, its first recession print.  The USLONG (long leading index) went from -32.2 to -37.8, its 7th negative print. Using the average/median lead times of the various models, together with how long they have already been in recession territory, […]

Without a doubt, a U.S recession appears to be baked into the cake. We can’t say it is going to be severe, but what we can say is that the indicators suggest it will be non-trivial: The big question on everyone’s minds though, is if the US stock market has fully discounted for this and if the bear market bottom is in. Our research on the common factors observed at recessionary bear market bottoms shows that only 3 of the […]

The chart below shows the size of securities held outright by the US Federal Reserve versus Wilshire Total market index as stock market proxy. We see the various quantitative easing programs that propelled the stock market higher including the massive Covid19 liquidity injection that set stocks on a never-before-seen trajectory On the surface it appears that when the size of the FED balance sheet is flat or shrinking (tapering) stock returns are either muted/volatile or negative. Similarly when the balance […]

Since the onset of Covid-19, there has been a lot of research (and release) of alternative (non traditional) high-frequency data to measure the extent of the economic collapse brought on by coronavirus lockdowns, as well as to measure the post-lockdown economic recovery. Think of Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Apple (NASDAQ:AAPL) and SafeGraph geolocation data to track movement of people around workplaces and residential places, foot and transit traffic data, hotel occupancy, movie ticket sales (BoxOfficeMojo), TSA traveler throughput, seated diners (OpenTable) and so forth. We […]

One of the most accurate and reliable leading indicators we have discovered for the U.S daily new Coronavirus infections curve is the percentage of 52 US states that have an increasing or decreasing rate of new daily infections being reported. This indicator tops out before the national US infection tally and likewise bottoms before the national US infection tally. It is thus an early warning indicator for change in direction of the daily new infections curve. The percentage of US […]

After hundreds of client Zoom consultations over the last 6 months, the request for a fundamentally-driven macro-risk model for cryptocurrency (specifically Bitcoin), similar to the ones we provide for the US economy and SP500, was one of the many topics topics among just under 49% of the calls. The request was highest among high net-worth private investors, family offices and small funds, but we expect company treasurers and larger institutions to become more formally involved with Bitcoin as a possible […]

The SP500 has put in a 7.4% peak-to-trough correction since 12 October. In the last 20 years, according to our SP500 probability model, corrections of more than this magnitude have occurred only 11.4% of the time, hinting at a 88.6% probability the worst is over. The SP500 has also put in lower weekly closes 3 weeks in a row. Additional lower weekly closes have only occurred 15.9% of the time in the past, implying a 84.1% probability the worst is […]

For a while, it seemed we had tamed the coronavirus epidemic in the US. But new daily cases are on the 3rd surge since the epidemic hit US shores: The U.S lags most of Europe’s ‘  countries by about 4-6 weeks on the coronavirus curve. When we saw the infections picking up in Europe after lockdowns had been eased, we wondered if the US might be able to dodge a bullet, but sadly it appears a new wave of infections […]

In this exercise, we examine the current behavior of various of our US leading economic indexes to past history to determine a likely recession exit date. The charts we display below are automatically displayed (depending on your selections) in the monthly data file Analysis Tool that is published for PRO subscribers, and can be found in the new RECOVERY sheet in the Excel workbook. We start with our oldest and most widely followed index, the Weekly Leading SuperIndex: Let us […]

We wish to highlight the following recent additions and improvements since April 2019, to our subscriber deliverables, as well as highlight some older features you may not be aware of. 1.Alerts archive Many subscribers do not know that you can access a multi-year chronological archive of end-of-day alerts from the REPORTS>ALERTS tab. 2. Stock Market reports The RecessionALERT Valuation Index (RAVI) quarterly report is published in the STOCK MARKET tab, where the Monthly Composite Market Health Index (CMHI) report is […]

NOTE : All the charts displayed below are updated daily/weekly and available for subscribers from the various chart menus. Since the peak daily infection rate of over 75,000 achieved on 17 July 2020, daily infections fell consistently to a trough of just over 20,000 on 8 September 2020. During this period, US national economic mobility (Google workplace less residential mobility indices) climbed slowly as the economy attempted to get back to work. Since just after Labor Day however, the daily […]

Global Business Mobility, defined as GDP-weighted Google geolocation data of workplace less residential mobility for the 24 largest economies in the world, representing over two-thirds of global GDP, remains in decline despite a recent uptick: When excluding USA from the data, the situation appears even worse, as depicted by the second chart above showing steeper decline of business mobility as well as a daily Covid19 infection rate that appears on the rise. This is due to the fact that the […]

The US State and G8 Mobility Charts have just been updated in the Covid menu. The U.S has seen a whopping increase in infections across a broad swathe of states since emerging from lockdown : As a result, US and state economic mobility has taken a huge hit. Although the US is only about 49% of the G8 GDP, there are enough G8 members also taking strain to stall the entire G8 group recovery. Since the G8 represent almost 49% […]

NOTE : All images and charts displayed below are regularly updated and available to subscribers from the CHARTS menu. The SP-500 has enjoyed an incredible 40% rally since the 23 March lows. This was mostly fueled by an unprecedented FED stimulus program, which is now coming to an end within the next few weeks: Unless more stimulus is unleashed (and a further $1.5-$2 trillion seems likely) the risks of a stock market selloff are high, especially given that the market […]

Note : Most charts shown below are available to subscribers in the COVID19 analytics section. Summary Economic mobility in US increasing at a slower pace than Covid-19 infections, contrary to rest of G7. At a state level, New York, New Jersey, Massachusetts & Michigan are leading economic mobility recovery vs infections. US has moved from a peaked scenario to join a host of second-wave countries struggling to contain infections after lockdowns. Stock market is going to struggle to post new […]

The National Bureau for Economic Research (NBER) has announced official start dates for the 2020 US recession. It is very rare for such quick pronouncements (they are normally made 9-12 months after the fact) but the fact that 90% of the economy came to a sudden halt, has led to such deep declines in their metrics that they could make an early pronunciation without risk of being proven wrong later. The monthly economic peak was declared as February 2020 (first […]

The STM Seasonality Model is a unique composite that looks at average monthly gains, gain-to-loss ratios and percentage of winning months for 1,2,3 and 4 year cycles to arrive at a composite seasonality score for each month. For the last 18 months, the model has been running at 80% directional accuracy on calls on the SP500 future direction which is rather remarkable given the strange times we are living in. Even though May month was forecast as a non-leveraged long […]

We examined SP-500 behavior in the lead to and during US recessions a few years ago in an old research note (Recession – Just how much warning is useful anyway?) to conclude that more than 5-months warning before a recession was not constructive, and that you should focus on recession warning models that stuck to a 4-6 month historical lead time as close as possible. Given the “voluntary” sudden-stop of the U.S economy due to Coronavirus lock-downs, we are faced […]

Businesses are going to be shuttered in massive numbers as the U.S has to deal with the unavoidable nationwide lock-down that will be required to contain the highly contagious Coronavirus. From our Covid19 Dashboard we maintain for our subscribers, we can see that the number of cases is rising according to a quadratic equation that will yield over 100,000 cases by the end of this week and over 500,000 cases by 7th April (assuming trends hold.) Hospitalizations are running at […]

Further to our March 5th 2020 warning on a looming Coronavirus (COVID19)  global pandemic, the WHO has finally recognized as such and declared the outbreak an official global pandemic. It is not hard to see why, when one looks at the chart below: Whilst China has managed to stabilize new infections (assuming their numbers are to be trusted) the rest of the world does not have the luxury of their socialist command-and-control government, hospital building productivity, general mobilization, hive-mind population […]