Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Macro-Markets Risk Index

Published 04/24/2013, 03:13 AM
Updated 07/09/2023, 06:31 AM

A markets-based profile of US economic conditions suggests that the business cycle risk remains low. The Macro-Markets Risk Index (MMRI) closed yesterday (April 22) at 13.7%--well above the danger zone of 0% and within the 10%-to-15% range that's prevailed so far in 2013. When MMRI falls under 0%, recession risk is elevated; readings above 0% equate with economic growth.

MMRI represents a subset of the indicators in the Economic Trend & Momentum indices, a pair benchmarks that track the economy's broad trend for signs of major turning points in the business cycle. Analyzing the market-price components separately offers a real-time evaluation of macro conditions, according to the "wisdom of the crowd." By contrast, conventional economic data series are published with a time lag. MMRI is intended as a supplement for developing perspective on the current month's economic trend until the formal updates are published.

MMRI is a daily average of four indicators, calculated as follows:

• US stocks (S&P 500), 250-day % change

• Credit spread (BofA Merrill Lynch US High Yield Master II Option-Adjusted Spread), inverted 250-day % change

• Treasury yield curve (10-yr Treasury yield less 3-month T-bill yield), daily, no transformation

• Oil prices (iPath S&P GSCI Crude Oil Total Return Index ETN (OIL)), inverted 250-day % change

For additional information on MMRI, see this post that introduced the index. Meanwhile, Here's how MMRI compares on a daily basis since August 2007:

Macro Market Risk Index - 1
Here's how MMRI stacks up so far this year, through April 22:
Macro Market Risk Index - 2

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.