The Previous Updates

July 5, 2018

 

Business Cycle Index

BCI-7-5-2018

The BCI at 246.4 is above last week’s level, and for the current Business Cycle, at a new high indicated by the BCIp 0f 100. Also, the 6-month smoothed annualized growth BCIg at 15.8 is above last week’s level.

No recession is signaled.

 

 


Posted on Jul 5, 2018 | Leave a comment


July 6, 2018

Market Signals Summary:          

The MAC-US model is invested. 

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The MAC-AU is also invested.  The recession indicators COMP and iM-BCIg do not signal a recession. 

 

Stock-markets:

Fig-2.-7-6-2018The MAC-US model generated a buy-signal 4/5/2016 and thus is invested in the stock-markets. The sell-spread (red graph) is above last week’s level and has to fall below zero to signal a sell.

 

 

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Fig-2.1-7-6-2018The MAC-AU model is invested in the markets after it generated a buy signal on March 21, 2016. The sell-spread is remains near last week’s level and has to fall below zero to signal a sell.

This model and its application is described in MAC-Australia: A Moving Average Crossover System for Superannuation Asset Allocations.

 

Recession:

Fig-3.-7-6-2018Figure 3 shows the COMP  below last week’s downward revised level. No recession is indicated.    COMP can be used for stock market exit timing as discussed in this article The Use of Recession Indicators in Stock Market Timing.

 

 

Fig-3.1-7-6-2018Figure 3.1 shows the recession indicator iM-BCIg  above last week’s level. An imminent recession is not signaled .

Please also refer to the BCI page

 

 

Fig-3.2-7-6-2018The Forward Rate Ratio between the 2-year and 10-year U.S. Treasury yields (FRR2-10) is down from last week’s level and is not signaling a recession.  The FRR2-10 general trend is downwards.

A description of this indicator can be found here.


Posted on Jul 6, 2018 | Leave a comment

Monthly Updates

June 1, 2018

Unemployment

Fig-8.-6-1-2018The unemployment rate recession model (article link), has been updated with the May UER of 3.8%. 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 is at minus 12.2% (last month minus 10.76%) and EMA spread of the UER is at minus 0.28% (last month minus 0.2.3%).

Here is the link to the full update.

The Dynamic Linearly Detrended Enhanced Aggregate Spread:

DAGS-6-1-2018The updated level of this indicator, -147bps, above last months -143bps, confirms the January 20, 2017 signal. Based on past history a recession could have started at the earliest in October 2017, but not later than May 2019. The average lead time to previous recessions provided by DAGS was 15 months which would indicate a recession start for April 2018. (Note: All our other recession indicators are far from signal a recession.)

 

Coppock Indicator for the S&P500

Fig-9.-6-1-2018The Coppock indicator for the S&P500 entered the market end May 2017 and generated a new buy signal in mid February 2018 This model is in stocks.   This indicator is described here.

 

 

CAPE-Cycle-ID

Fig.9a-6-1-2018Fig 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-6-1-2018 The Trade Weighted $ value is strengthening.

 

 

TIAA Real Estate Account

Fig-10.-6-1-2018The  1-year rolling return for the end of last month is 4.81%.   A sell signal is not imminent.

Read more …

 

 

 


Posted on Jun 1, 2018 | Leave a comment

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