Prediction
#sp500 #indicator #bearish #personalsavingrate #pandemicsavings
We can use the following #indicator to monitor how much more is left in current bull market of #SP500
- #SP500 to Gold ratio, data goes back to 1950s, we can see 2.49 to 2.67 is a resistance area, right now, it is at 2.20 (SP500=4079 and Gold=$1879), so the #SP500 may still have some upside from here. Historically, divergence of this metric against #SP500 is a #bearish sign of stock market.
- #SP500 Trailing 10-year Nominal Earnings Yield, based on four-quarter GAAP EPS averaged over trailing 10-year windows divided by the prevailing #SP500 level, has data from 1910 through 2022, current level is around 3 much lower than last 100 year average level of around 6.
- The Yield Premium from stocks has vanished, yield premium is defined as #SP500 earnings yield less the three-month Treasury Bill rate.
- How much money (#PandemicSavings) consumers have left in their wallet to spend before recession. This comes from two data points from FRED: Real Personal Consumption Expenditures: Goods and #PersonalSavingRate. As Personal Saving Rate plummets, expect above trend line Real Personal Consumption Expenditures to conform to multi-decade trend line.