Monthly Update – January 2017

Unemployment

Fig-8.-1-6-2017The unemployment rate recession model (article link), has been updated with the December UER of 4.7%. Based on the historic patterns of the unemployment rate indicators prior to recessions one can reasonably conclude that the U.S. economy is not likely to go into recession anytime soon. The growth rate UERg decreased to -5.61% (previous at -4.82%) and EMA spread of the UER is -0.20% (previous at -0.21)

Here is the link to the full update.

 

 

The Dynamic Linearly Detrended Enhanced Aggregate Spread:

DAGS-1-6-2017 .Long leading indicator DAGS at 11 (last month 9), a level from which it has never recovered in the past. Should this downward trend continue then, according to this indicator, a recession could be expected to begin after September-2017.

On January 20, 2017, our long leading recession indicator DAGS signaled an oncoming recession. Based on past history a recession could start at the earliest in 6 months, but not later than 28 months from now. The average lead time to previous recessions provided by DAGS was 15 months.

 

 

Coppock Indicator for the S&P500

Fig-9.-1-6-2017The Coppock indicator for the S&P500 generated a buy signal on May 19, 2016.  This model is now in the market.   This indicator is described here.

 

 

CAPE-Cycle-ID

Fig-9a-1-6-2017Fig 9a depicts the CAPE-Cycle-ID and the year-on-year rate-of-change of the Shiller CAPE.  A model using this indicator invests in the market when the Cycle-ID is +2 or 0, and when the Cycle-ID equals -2 the model is in cash. This indicator is described here.

 

 

Trade Weighted USD

USD-1-6-2017 The TW$ value has again risen and the 6 month moving average is increasing too.

 

 

TIAA Real Estate Account

Fig-10.-1-6-2017The  1-year rolling return for the end of last month is 5.20%.   A sell signal is not imminent.

Read more …

 

 

 

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