Leading Economic Index

Weekly Update

Rising Interest Rates May Now Portend Economic Growth

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Published July 7, 2023

 

There are a wide range of inputs portraying a change in investor attitudes over the past few weeks. Our friends at Delta Research offer one possibility of the change in how interest rates are viewed. We hope you find it interesting.

“The Federal Reserve raised the Fed Funds rate from 0%-0.25% to 5.00-5.25% since March of last year. The pace and amount of rate increases came as a surprise to most market strategists. The reason for the surprise is market strategists believed the economy would slow rapidly as a result of much higher interest rates. Coming into 2023, the market expectation was for one more rate hike, a pause and then rate cuts in the second half of the year. The Fed raised rates in March and May of this year and now is expected to raise again in July and then once again later in the year. (more…)

Weekly Update

Which Is Right: The Stock Market or Economic Indicators?

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Published February 3, 2023

 

Below, we augment an article by Lance Roberts considering the conundrum investors face re: a strong stock market in the face of lots of recessionary indicators.

“Despite mounting evidence supporting recession forecasts, the stock market remains at odds with that outlook. That leaves investors in a predicament of avoiding a further drawdown in stocks but also not wanting to miss out on a potential recovery. (more…)

Weekly Update

What Happens to the Market if We Have a Recession?

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Published December 30, 2022

 

Below is a high-level summary of the past year and potential decline levels for the S&P 500 if a recession comes about. Thanks to the folks at Delta for the summary information and to our friend Ravi Palaiyanur for the bottom chart.

“Two of the most robust, leading indicators of recession are the inverted yield curve and a negative six-month moving average of the Leading Economic Index (LEI). The six-month moving average of the LEI turned negative in June and the 2yr/10yr treasury inverted in July. (more…)

Weekly Update

A Review of Economic Indicators

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Published April 1, 2022

 

This week saw a strong move in growth stocks with breakouts in small-cap growth, software, semiconductors, real estate and other beaten-down growth and cyclical areas. This is a positive development for the broader stock market as the rally expands its reach beyond the commodity and defensive leaders of the past few months. (more…)

Weekly Update

Historical Returns Data Suggests More Gains in 2022

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Published December 17, 2021

This week we offer another outlook for 2022; this time from Delta. Reading various outlooks from different groups can, taken together, provide a view of what the ‘market’ expects. Note that our models rely on actual price data and do not include any forecasted information such as these outlooks. (more…)

Uncategorized, Weekly Update

A Mixed Bag Economy

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Published August 30, 2019

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Liz Ann Sonders at Charles Schwab recently wrote a thorough overview of the current economic state. Given the latest increase in economic uncertainty courtesy of the ramping of the trade war—but also last week’s release of the Leading Economic Index (LEI), her report is worth posting here for our subscribers who are interested in tracking the economy and musing about where that might be headed. (more…)