Economic DashboardSubmitted by Texas Legacy Wealth Management on July 19th, 2021
We recently made two updates to our economic dashboard: upgrading our market sentiment indicator to green and downgrading our market breadth indicator to yellow. Overall, we believe that our economic dashboard continues to suggest a low probability of recession over the next 6-9 months.
Market Sentiment- Over the past few weeks, market sentiment has become more pessimistic. Sentiment is considered a contrarian indicator meaning that this worsening in sentiment is considered a better sign for stock market returns and warrants a move back to green. That said, we will continue to watch this indicator closely as sentiment tends to change quickly.
Market Breadth- On the other hand, market breadth, a measure of how many stocks are participating in a market move, has trended in the opposite direction. While the S&P 500 hit new all-time highs last week, overall stock participation was weaker. This lack of participation could signal near-term volatility.
*Investment advice offered through TLWM, LLC., a registered investment advisor.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The American Association of Individual Investors (AAII) is an investor education organization. The sentiment survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market short term; individuals are polled from the AAII Web site on a weekly basis.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
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