As of March 31st of 2019 the risk of recession in the US has doubled. In fact one of the models is indicating a 48.03% probability of recession and the average of the models jumped to 22.38% vs 12.42% in January of 2019.
Probability of a US Recession
S&P500 Probability of Bull Market
The probability of the S&P500 being in a state of "bull market" went down from 91.67% to 88.19%. The movement is not relevant in this indicator as of today.
The important thing to note here is that changes are happening in the state of the economy and we should be very alert.
Also it is interesting to note that the trends of the "building permits for new houses" and the "housing starts" indicators are changing. The trend is flat for "housing starts" and for "new building permits of new houses" the trend is downward if observed from the end of 2017. This observation is important because the new house building permits is a leading indicator.
Matthew Famiglietti and Carlos Garriga from the Federal Bank of St Louis had also published an article that suggests that new house building permits could also be used to predict a yield curve inversion. (See the article in the following link: https://research.stlouisfed.org/publications/economic-synopses/2019/04/15/predicting-the-yield-curve-inversions-that-predict-recessions-part-2).
Best Regards,
Humberto Aguilar
Disclaimer: This is only an opinion and I am not responsible for how this information is used. I am not recommending anything.
