The Previous Updates
February 8, 2018
Business Cycle Index
The BCI at 236.3 is below last week’s downward revised 237.6, and it is below this business cycle’s peak as indicated by the BCIp at 84.5. Also, the 6-month smoothed annualized growth BCIg is at 16.3, which is below last week’s downward revised 17.3.
No recession is signaled.
February 9, 2018
Market Signals Summary:
The MAC-US model is invested.The MAC-AU is also invested. The recession indicators COMP and iM-BCIg do not signal a recession.
The MAC-US model generated a buy-signal 4/5/2016 and thus is invested in the stock-markets. The sell-spread (red graph) is below 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:Figure 3 shows the COMP above last week’s 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.
Please also refer to the BCI page
A description of this indicator can be found here.
January 5, 2018
UnemploymentThe unemployment rate recession model (article link), has been updated with the November UER of 4.1%. 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 13.97% (last month 13.56%) and EMA spread of the UER is at minus 0.26% (last month minus 0.28%).
Here is the link to the full update.
The Dynamic Linearly Detrended Enhanced Aggregate Spread:The updated level of this indicator, -146bps (last months -133bps), 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&P500The Coppock indicator for the S&P500 entered the market end May 2017. This model is in stocks. This indicator is described here.
Fig 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 USDThe Trade Weighted $ value is seemingly weakening.
TIAA Real Estate AccountThe 1-year rolling return for the end of last month is 4.43%. A sell signal is not imminent.