Broker Check

The Weekly Update for 11/18/2022

| November 18, 2022
Share |

The big, fat, black fly in the ointment! There! I said it!

I am referring to our peek around the economic quarter six to nine months in the future, May 2023 – August 2023, The Conference Board’s Leading Economic Index (LEI).

What does it look like?

                                2022 LEI

                January                -.30%

                February              +.30%

                March                   +.30%

                April                       -.30%  ---------Begin “Death Rattle” here

                May                        -.40%

                June                       -.80%

                July                         -.50%

                August                    -.30%

                September              -.40%

The LEI is down -2.80% over the six-month period between March and September 2022.  This is a significant reversal from a +1.40% growth rate over the prior six months.

Why does this matter?  The Conference Board’s Senior Director of Economics, Ataman Ozyildirim, said “persistent downward trajectory in recent months suggests a recession is increasingly likely before year end”.  Pretty sure “Ozzy” (I just made that nickname up) wants to keep his job and what he wanted to say was this quote from LPL Research on 10/21/2022.

“Since the inception of the LEI Index, a decline of this magnitude over a six-month period always foreshadowed a recession in the coming quarters…If the economy falls into a recession, the cause will likely be from the consumer sector retrenching after years of inflationary pressure, high housing costs, and slow wage growth.”

I’m interested in your thoughts, comments, and observations.  Feel welcome to call, email or stop by the office and say Hi.

Respectfully,

James O. Lunney, CFP®

CERTIFIED FINANCIAL PLANNER™ Professional  

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.

Share |