US Equities Market: A Second Recession Flag?

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.

2 replies on “US Equities Market: A Second Recession Flag?”

  1. Another author picked up on your article: Is This Another 2008 Or 2009? by Jeff Miller
    http://seekingalpha.com/article/295468-is-this-another-2008-or-2009?source=email_authors_alerts

    After reading Mr. Miller’s article I am not so sure he got the point of Mr. Hansen’s article. He wrote, “has chosen to include the stock market as a recession signal.” And then goes on to say, “I hope that my astute readership will be unimpressed by this marginal indicator on a handful of cases.”.

    If anything, I am unimpressed with Mr. Miller.

    Interesting chart and another one MANY points of interest in reading the tea leaves.

    Thanks.

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