Recession?

Employment Falloff

Now or Future?

• DYI’s Recession warning checklist:

• Two year Treasury notes invert ten year Treasury Bonds.

• Widening credit spread…Comparing yields between the 5 year Treasury note and Vanguard’s High-Yield Corporate Bond Fund.

• Falling stock prices…S&P 500 fifty day moving average below the two hundred day moving average.

• Falling Home Builders Index…The indexes fifty day average below its respective two hundred day average.  Wells Fargo Housing Market Index symbol HMI 

• Purchases Managers Index:  PMI below 50

DYI:  When all five indicators are present recession is imminent – within 90 days – or already present but not recognized by the majority of the investment community.

There are only two indicators remaining - S&P 500 and the Home Builders Index with their 50 day moving average below  their 200 day moving averages.  So far that has not occurred not yet signaling a decline in employment.  So hold onto your cash and gold we can only wait for better valuation.   

DYI