Increasingly data and the reality on the ground are not matching. It is I’m portsnt to note one aspect of the CAB is equity prices. It will fall when stock prices do…
“Davidson” submits:
The Chemical Activity Barometer(CAB) reported an all-time high since 1919. It is the longest series of all indicators available with a sound correlation to economic activity. Included in the chart from Jan 1990 is a marker for the 9/11 Terror Attack. This serves as a reminder that markets are determined by market psychology regardless of economic activity at the time. Recessions in hindsight are determined by the NBER(National Bureau of Economic Research), but the CAB has always turned higher at those points where the NBER determined recession end points.
The CAB has reported an all-time value with NBER and many investors still uncertain of current economic trends. With significant levels of sideline capital in Money Funds uncommitted, the potential for significant rise in equity markets remains.
Buy equities of under-owned companies core to US economic activity. The recession is long over. Many still believe it is with us when it has long passed. There remain many opportunities in multiple economic sectors.
