Chicago Fed National Financial Conditions Index and Recessions This indicator provides an update on U.S. financial conditions in money markets, debt, equity markets and the traditional & “shadow” banking systems. If financial conditions tighten sharply, this indicates a coming slowdown.
Effect of Financial Conditions on U.S. Real GDP Growth Chart suggesting an improvement of U.S. real GDP growth in 2020, as the impulse from financial conditions turns positive. Image: Goldman Sachs Global Investment Research
Cumulative Number of Global Rate Cuts since the Global Financial Crisis This chart puts into perspective the cumulative number of global rate cuts since the Global Financial Crisis. In 2019, central banks in OECD countries haven’t cut this much since the Great Financial Crisis. Image: BofA Merrill Lynch Global Research
U.S. Financial Conditions Relative to the low VIX and favourable financial conditions, the equity risk premium remains quite high. Image: Fidelity Investments
Chicago Fed National Financial Conditions Index and S&P 500 Financial conditions remain easy, which is historically bullish for U.S. equities. Image: BofA Global Research
Probability of U.S. Recession – Real Economic Variables vs. Financial Variables Real economic variables do not suggest that a recession is imminent, while financial variables point to a higher risk of recession. Image: Nordea and Macrobond Click the Image to Enlarge
The Market Risk Indicator (Global Financial Stress Index) According to BofAML, the global financial stress index is a more accurate market risk indicator than VIX. Image: BofA Merrill Lynch Global Research
Valuation – Real Assets vs. Financial Assets Chart suggesting that real assets are at all-time lows relative to financial assets. Image: BofA Merrill Lynch Global Investment Strategy
Debt to Net Worth Ratio for U.S. Households vs. Financial Obligations Ratio Chart suggesting that U.S. household finances are in good shape. This is good news for consumption spending, which accounts for about 70% of all U.S. economic activity. Image: NBF Economics and Strategy
GSER Financial Conditions Index and U.S. GDP Growth Chart suggesting that financial conditions should improve U.S. GDP growth. Image: Macronond, SEB X-Asset Research