U.S. Long-Term Business Cycle and Recessions This chart suggests that historically, when the U.S. long-term business cycle peaks in the 90th percentile and turns lower, it doesn’t bode well for equities around 4 months later on average. Image: Pictet Asset Management
U.S. ISM Non-Manufacturing Index vs. U.S. ISM Manufacturing Index and Recessions Interesting chart showing the spread between the U.S. ISM Non-Manufacturing Index and the U.S. ISM Manufacturing Index over time. Image: Pictet Asset Management
Global Equity vs. Bonds and U.S. Unemployment Rate and Recessions The chart shows that the U.S. business cycle drives global asset allocation and suggests a possible U.S. recession in 2020. Image: Pictet Asset Management
University of Michigan Consumer Sentiment Index – Current Conditions Index This index has been negative year-over-year for 8 consecutive months. This is rare outside of recession. Image: Pictet Asset Management
ISM Manufacturing Index and U.S. Yield Curve Inversion This chart suggests that the ISM Manufacturing Index tends to trough 19 months after the U.S. (10Y-3M) yield curve inverts. Image: Pictet Asset Management
S&P 500 Average Performance -2Y/+2Y with U.S. Yield Curve Inversion History tells us that on average, the S&P 500 peaks 42 weeks after (10Y-3M) yield curve inversion. Image: Pictet Asset Management
The Impact of an Inverted Yield Curve Great charts showing that a flat/inverted yield curve implies weaker U.S. GDP growth, lower equity returns, and higher volatility. Image: Pictet Asset Management
Gold vs. U.S. 10-Year Real Yield The chart shows the nice correlation between the U.S. 10-year real yield (inverted) and the price of gold as a defensive asset Image: Saxo Bank
U.S. Business Cycle Indicator The Morgan Stanley’s cyclical indicator is still in “downturn.” The entry into the “downturn” phase suggests lower returns for stocks and risky assets. Image: Morgan Stanley Research
ISM Manufacturing Index and U.S. Long-Term Business Cycle The risk of recession increases when the Macro Composite is above 90% and the ISM Manufacturing Index is falling. Image: Pictet Asset Management
Percentage of U.S. States with Rising Unemployment vs. NY Fed Recession Probability Model The NY Fed recession probability model could suggest an increase in the percentage of U.S. states with rising unemployment over the next 12 months. Image: Pictet Asset Management