The S&P 500 Reached Our Target, So Time for A Quality Shift
US recession risk has receded in the near-term but remains elevated over a 12-month horizon. According to our modeling, the probability of a mild US recession over the next six months has fallen from 50% to 45% due largely to a stabilization in the US banking sector. In addition, the firmness in the labor market continues to defy alternative measures of economic activity which are much weaker. Ultimately, we hypothesize that labor market data will converge with the softer economic data, rather than the other way around. Over the next 12 months, our proprietary recessionary probit model is signaling an exceedingly high…
US recession risk has receded in the near-term but remains elevated over a 12-month horizon. According to our modeling, the probability of a mild US recession over the next six months has fallen from 50% to 45% due largely to a stabilization in the US banking sector. In addition, the firmness in the labor market continues to defy alternative measures of economic activity which are much weaker. Ultimately, we hypothesize that labor market data will converge with the softer economic data, rather than the other way around. Over the next 12 months, our proprietary recessionary probit model is signaling an exceedingly high…
