Fed Funds vs. 2-Year U.S. Treasury Yield (Leading Indicator) The current 2-year U.S. Treasury yield, which is below the federal funds rate, indicates that the Fed’s monetary policy is restrictive. Furthermore, the 2-year yield typically leads the fed funds rate by about 20 weeks. Image: Morgan Stanley Research
Sentiment Indicator and Stock Positioning The current investor sentiment, as reflected by the GS sentiment indicator, is slightly positive, suggesting a cautiously optimistic outlook. Image: Goldman Sachs Global Investment Research
Yield Curve vs. VIX (Leading Indicator) Should U.S. equity investors anticipate increased volatility ahead, given that the yield curve typically leads the VIX by three years? Image: BofA US Equity & Quant Strategy
Sahm Rule Recession Indicator – U.S. Unemployment Rate While the Sahm Rule has historically been a reliable predictor of U.S. recessions, the current labor market dynamics differ from past recessions and may challenge its applicability in the present context. Image: Goldman Sachs Global Investment Research
U.S. Stock Market Bull and Bear Indicator Using multiple financial data, this great model helps investors navigate through different market conditions. It suggests whether the U.S. stock market tendency is bullish, bearish or neutral. It is a contrarian indicator. A bullish signal suggests that the U.S. stock market may go up, while a bearish signal…
Sell Side Consensus Indicator The Sell Side Indicator, which tracks Wall Street strategists’ equity allocation recommendations, rose in August. The current level suggests that the S&P 500 may see positive gains over the next 12 months Image: BofA US Equity and Quant Strategy
S&P 500 Going into a Sahm Rule Recession Indicator Trigger Event The recent triggering of the Sahm Rule indicator has diverged from the typical behavior of U.S. equities seen in the lead-up to a recession. Investors should be cautious before drawing conclusions about a potential U.S. recession. Image: BofA Predictive Analytics
Risk Appetite Indicator Level and Momentum Factors The sharp decline in the risk appetite indicator, which typically coincides with periods of market stress, implies that investors have grown more risk-averse and less inclined to hold risky assets. Image: Goldman Sachs Global Investment Research
Different Market Sentiment Indicators Most market sentiment indicators show a willingness to take on risk, suggesting an optimistic outlook for the market. Image: Goldman Sachs Global Investment Research
Market Sentiment Indicator Morgan Stanley’s market sentiment indicator is currently in a neutral position. This suggests that investors do not have an overly bullish or bearish outlook on the current market conditions. Image: Morgan Stanley Research