New Highs for the Pring Turner Leading Indicator Suggests Low Risk of Recession Today
Most severe stock market declines (-20% or more) have occurred during economic recessions. For individuals in retirement it is especially critical to avoid recession driven market declines in order to effectively secure a stable retirement lifestyle. Recovering from these big losses can be a difficult and highly stressful endeavor. That is one very important reason why our financial advisory firm closely follow the natural rhythm of business cycle swings and stay on alert for the next major turning point in the economy.
The Pring Turner Leading Economic Indicator featured above is a leading indicator for the economy designed to signal the onset of recession months in advance. What is this reliable forecast tool telling us now? The latest reading has pushed this leading economic indicator to new highs, and momentum is re-accelerating to the upside signaling low risk of recession in the months directly ahead. Continued economic strength should translate into higher stock prices. In other words, there is no recession in sight that would change our longer term optimistic view for stocks.
Disclaimer: Pring Turner is a Financial Advisor headquartered in Walnut Creek CA, and is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940. The views represented herein are Pring Turner’s own and all information is obtained from sources believed to be accurate and reliable. This information should not be considered a solicitation or offer to provide any service in any jurisdiction where it would be unlawful to do so. All indices are unmanaged and are not available for direct investment. Past performance does not guarantee future results.
Articles filed under Martin Pring's Technical Corner
December 8, 2020 - A year ago, as the economy was emerging from its third slowdown following the financial crisis, commodity prices looked set to move higher. However, due to the pandemic lockdown, the global economy abruptly fell into recession and commodity prices quickly... Continue Reading
September 8, 2020 - The S&P Composite has rallied close to 60% since late March, making a historic and remarkable round trip in a short period of time. You would think that after such a move it would make sense to anticipate a significant... Continue Reading
June 9, 2020 - Where Have We Been? Back in February the stock market registered new highs. At the same time, several of the leading indicators we follow were tentatively signaling the emergence of the economy from its third growth slowdown since the financial... Continue Reading
May 7, 2020 - Chart 1 below compares the S&P to our Master Economic Indicator (MEI). It combines the momentum of six leading economic indicators and comes into its own when economic activity causes it to drop below the -40% level and then moves... Continue Reading
January 6, 2020 - A large part of the Pring Turner investment approach is derived from the fact that the business cycle is nothing more or less than a repetitive chronological sequence of events. The cycle begins with a bottoming in the interest sensitive... Continue Reading