Monthly Update – July 5, 2019

Unemployment

Fig-8.-7-5-2019The unemployment rate recession model (article link), has been updated with the May UER of 3.7%. The model does not signal a recession.

Here is the link to the full update.

 

The Dynamic Linearly Detrended Enhanced Aggregate Spread:

DAGS-7-5-2019

The updated level of this indicator, -263bps, below last months -245bps, confirms the January 2017 signal. Based on past history a recession could have started as early as October 2017, but not later than April 2020. The average lead time to previous recessions provided by DAGS was 15 months which would indicate a recession start for April 2019. (Note: All our other recession indicators are far from signal a recession.)

 

 

CAPE-Cycle-ID

Fig-9a-7-5-2019Fig 9a depicts the CAPE-Cycle-ID and the year-on-year rate-of-change of the Shiller CAPE; the level moved from +2 to +0 end of May-2019. This indicator is described here.

To avoid the bear market, exit stocks when the spread between the 5-month and 25-month moving averages of S&P-real becomes negative and simultaneously the CAPE-Cycle-ID score is 0 or -2. (read more)

 

Estimated Forward 10-Year Returns

Fig-9b-7-5-2019The estimated forward 10‐year annualized real return are estimated at 62% with a 95% confidence interval : 4.8% to 7.6%, which is unchanged from last month.

 

 

iM-GT Timer

Fig-10-7-5-2019The iM-GT Timer, based on Google Search Trends volume is invested in the markets 7/1/2020. This indicator is described here.

 

 

Trade Weighted USD

USD-7-5-2019 The Trade Weighted $ value has an inderterminate trend.

 

 

 

TIAA Real Estate Account

Fig-11.-7-5-2019The 1-year rolling return for the end of last month is 5.22%. A sell signal is not imminent.

Read more …

 

 

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