Monthly Update – October 7 , 2022


The 10/7/2022 BLS Employment Situation Report shows that the September unemployment rate reduced by 0.2% to 3.5% .



Fig-9a-10-7-2022Fig 9a depicts the CAPE-Cycle-ID and the year-on-year rate-of-change of the Shiller CAPE;  the level switched from +2 to 0 end of June 2022. The spread 5-25 month moving average  of the S&P real is negative this indicator now avoids the markets. 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-10-7-2022The estimated forward 10‐year annualized real return is 7.1% (previous month 6.4%) with a 95% confidence interval : 5.8% to 8.4% (5.0% to 7.7%). Also refer to the  Realized Forward 10-Year Returns vs. Inflation Rate Fig-9c-10-7-2022We may be in a rising inflation period with a falling CAPE-MA35 ratio similar to 1964-1973. This implies very low or negative 10 year forward annualized real returns, much lower than the returns indicated by regression analysis shown in the Estimated Forward 10-Year Returns.



iM-GT Timer

Fig-10-10-7-2022The iM-GT Timer, based on Google Search Trends volume indicator exited the stock markets beginning Septenber 2022. This indicator is described here.



Trade Weighted USD

USD-10-7-2022 Will be updated later, the weekly FRED data series we used was discontinued and replacement series is daily and runs from 2015. We need to adapt our software and graphics first.




TIAA Real Estate Account

Fig-11.-10-7-2022The 1-year rolling return is 18.84%.

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