Econintersect is not a fan of using equities markets to forecast the economy. However, an exception is made for its use as a recession indicator. Today, the S&P 500 closed at 1129 marginally lower than its level on 24 September 2010 of 1148.
The S & P closed down 3.19% on the day, is down 6.58% in the last five trading sessions, down 10.18% in 2011, and down 0.42% in the last year.
Although hard to believe, there have only been five groupings of penetrations below zero growth of the S&P 500 year-over-year since 1990. Score = 3 recessions, 2 false alarms, and one “wait-and-see”.
Previously, Econintersect raised a recession flag for imports which are contracting year-over-year.