U.S. Economy: Ready for a Change in the Weather?

 

The longest bull market in history continues – yet increased volatility has many investors wondering when and how that might change. The key is the U.S. economy. How close could we be to the next recession? What factors are most important to watch in the months ahead?
 

ClearBridge Investments’ exclusive Recession Risk Dashboard offers valuable answers, tracking key data along four vital economic fault lines. In Anatomy of a Recession, from equity manager ClearBridge Investments, discover how the Dashboard works and how it can help you stay prepared for future downturns.

 

Recession Risk: Stay Ready with Our Economic Updates

Register for our timely economic updates, which include changes to the U.S. Recession Risk Indicators and insights from our global thought leadership.

 

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Asset allocation does not assure a profit or protect against a loss.

 

 

U.S. Recession Risk Indicators

  • 12 variables have historically foreshadowed a looming recession
  • Only money supply signals risk right now

Data as of August 31, 2018.

Source: BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg.

U.S. Recession Risk Indicators

  • 12 variables have historically foreshadowed a looming recession
  • Only corporate profit margins signal risk right now

Data as of August 31, 2018.

Source: BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg.

U.S. Recession Dashboard

Case Study: 2006-2009

 

Source: BLS, Federal Reserve, Census Bureau, ISM, BEA, American Chemistry Council, American Trucking Association, Conference Board, and Bloomberg.

Resources


Anatomy of a Recession Program Overview

This brochure provides an overview of the Anatomy of a Recession program, how to use it to enhance your client conversations, and the resources available.


Insights


Midterm Elections: Divided Congress Signals Gridlock

With control of the Senate and House now divided, and the prospects for a recession still muted, the S&P 500 should continue to march higher in 2019 – with areas of potential opportunity for active managers in specific sectors. 


October Volatility Not Atypical 

As monetary policy normalizes and the economic cycle matures, volatile days like those just experienced may become more common. However, the end of the cycle appears to remain in the distant future, allowing investors to find opportunity amid market anxiety.


One for the Record Books

ClearBridge's Recession Risk Dashboard continues to point to healthy backdrop for the U.S. economy and further continuation of an already record-setting expansion, with equity markets benefiting from buybacks and other shareholder-friendly moves through the coming quarter.

 

In This Series

 

Date Title Description
October 12, 2018 Today's Challenge: Markets vs. Economics Last week's markets left investors looking to economics for clues; Italy faced up to the EU; China's trade surplus ballooned
September 10, 2018 Recession Indicators Update: Money Supply Economic conditions are shifting, but the ClearBridge Recession Risk Dashboard still points to expansion rather than recession.
July 03, 2018 Beyond the Wall of Worry Though trade war tensions could sidetrack investors, history suggests markets should rally after midterm elections -- with recession risks low going into Trump's third year in office.
May 03, 2018 U.S. Economy: Keep on Trucking Our Recession Risk Dashboard continues to signal that the likelihood of a pullback in the next 12 months is low -- a view supported by recent data on the volume of freight shipped via trucks.
April 09, 2018 Stocks: Perspective on the Pullback None of the catalysts behind the recent pullback have changed the larger backdrop for the market. Fundamentals remain solid, and we believe the current pullback has largely run its course.
January 16, 2018 Recession Risks Muted Heading Into 2018 The positive economic momentum that lifted equities over the past year should continue into 2018, with higher interest rates and inflation posing the biggest risks, notes ClearBridge Investment Strategist Jeff Schulze.



 

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