This subscriber-only client alert has now been unlocked for public viewing. NOTE : The RecessionALERT Valuation Index (RAVI) now warrants its own, more detailed, dedicated PDF report which you can now find in the REPORTS>RAVI menu tab: Well, it has finally happened, we have a recession and stock market bear warning from just about every RAVI indicator as at 1Q2019. All of the 8Q average of the 2YR forecast, the 4Q average of the 1YR forecast and the average annualized […]

Based on the methodology discussed here we hereby update our U.S Yield-curve inversion forecast and subsequent recession and stock market peak forecasts. All the forecast dates have moved foward by 1 month as the yield curve continues to print below its regression mean: As a matter of interest, 60% of all 10 possible term-spreads have now inverted, as shown below with our average yield curve composite of all 10 term-spreads: We have inversions on all the typical early inverters: 5’s […]

On 8th June 2018 we penned a warning that the worlds’ major 41 economies, as tracked by the OECD, were headed for a synchronized business cycle slowdown. You can read the article here : World headed for cyclical slowdown. Indeed, as you can see below, for quite a few months shortly afterward, we bottomed out with less than 11% of the 41 countries tracked having rising OECD LEIs: The percentage of 41 counties with a rising LEI seems to have […]

The RecessionALERT Weekly Leading Economic Index (WLEI) is essentially a first derivative indicator (rate of change). We can create the second derivative by measuring the percentage of time the WLEI has historically spent above the current reading. The history shows us that this is a good leading indicator for another WLEI metric, namely the percentage of WLEI components in recession territory (we call this the “WLEI Diffusion”): The 2nd derivative is diverging from the  WLEI Diffusion, and as we mentioned, […]

During the 6 months running from March to September 2018, the SP500 was running counter to the seasonal average returns profile of the 4-year U.S Presidential Cycle: It appears the seasonality averages eventually got their way and the SP500 fell hard in October 2018, in what was supposed to be a strong month. In all likelyhood the tailwinds of one of the strongest periods in the Presidential Cycle will come to bear and we should expect good returns for the […]

Despite the U.S leading economic indicators appearing healthy, the global economy appears to be headed for a slow down, with only 34% of the 40 countries we track having leading economic indicators (LEI’s) signalling growth ahead, and the actual GDP-weighted Global LEI growth now below zero: The specific country details are displayed below: The European countries, representing some 25% of world economic output have taken a decidedly worrisome turn : Many of these LEI’s include sentiment data, and its probably […]

Those of you who have been following us since 2010 will identify us a perma-bulls. Even in the depths of the ECRI 2012 /Hussman recession calls we were firmly bullish on the US economy and stock market – quite contrary to the popular consensus at the time. Those subscribers who have been diligently following the RAVI SP500 forecasting model and its consistently accurate bullish forecasts will have noticed this year that all the targets we have set for 3Q2018 have […]

The RecessionALERT Valuation Index (RAVI) has been updated for 1Q17 and for the first time since 1999, is forecasting negative 10-year total returns for the SP500: The chart on the right shows that the RAVI continues to forecast SP500 decade-ahead total returns with relative accuracy, especially when one considers that the green forecast line has data points that are seen 10 years before the black line depicting actual 10-year returns. Now there have been a lot of valuation models predicting […]