The Conference Board’s Leading Economic Index (LEI) fell for the sixth straight month in August, as its -0.3% decline was worse than economists’ consensus of 0.0%. The LEI previously made a small initial break below its 18-month moving average, but today’s drop made the break definitive (top graph). Likewise, the LEI’s rate of change sunk deeper into negative territory (bottom graph). With both of these indicators reiterating their recession warnings, the Conference Board is stating that they expect a recession to start “in the coming quarters” – a development which would very likely push the S&P 500 to new bear market lows…
Eli Petropoulos, CFA – Sr. Market Analyst
