The ECRI’s Weekly Leading Index jumped 3.3% during the first three weeks of January. It is up 7.9% from its low last year during the week of June 15. The Conference Board's monthly Leading Economic Index jumped 0.5% in December to a new cyclical high. Interestingly, the ECRI index is highly correlated with our Fundamental Stock Market Index (FSMI). Our index is less volatile than the Institute's. Both closely track the S&P 500 and also the yield spread between corporate junk bonds and 10-year Treasuries. Both the stock index and the yield spread are signaling more economic growth is ahead, certainly not a recession.
Today's Morning Briefing: Too Much Good News? (1) Jeremiah was bearish. (2) Today’s bears: Prophets or spoilsports? (3) A misleading leading index. (4) S&P 500 forward earnings confirms good economic news on orders and sales. (5) What’s troubling consumers? (6) No surprises in economic surprise index. (7) Regional surveys don’t jibe with upbeat national PMI. (8) Draghi’s “whatever it takes” triggers “positive contagion.” (9) Euro-TARP winds down. (10) TARGET2 balances less imbalanced. (11) Lending still falling in euro zone. (More for subscribers.)