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A "Crash" Course in Recession Indicators Please Join us on Monday, November 18, 2019 @ 12:30 PM ET - Add to Outlook Calendar Participating Dialing Instructions Toll Free: Toll: UK: 0 Confirmation Number: 13695051 CLICK HERE for event details (includes video link, materials link and dial-in). |
Over the last several months, the R-word has re-entered the lexicon of asset managers. The global economy is still decelerating. U.S. manufacturing (per the ISM PMI) has been contracting for 3 months running. And the political outlook is downright scary. But then again, the yield curve has de-inverted, equities are hitting new highs, and a Trump-Xi thaw is rumored. So what's the verdict: Is a recession still looming or not?
Let me use this occasion to offer A "Crash" Course on Recession Indicators. I will take viewers through the whole waterfront of recognized recession indicators. I will help viewers assess their various strengths and weaknesses. Some indicators are high likelihood but have short time horizons. Others are lower likelihood but give us better perspective on our location in the business cycle.
I identify 5 properties of a good recession indicator:
- CERTAINTY: The indicator is a sufficient condition for a recession. Strength: No false positives (type I errors).
- SENSITIVITY: The indicator is a necessary condition for a recession. Strength: No false negatives (type II errors).
- HISTORY: The indicator has a long track record (i.e., a large "n size").
- FORESIGHT: The indicator reliably signals the recession well before it arrives.
- PERSPECTIVE: The indicator reliably signals where we are in the business cycle. It informs us on cycle longevity.
Darius Dale, Hedgeye’s Managing Director of the Macro team, will join me for the discussion. Darius will offer special insights and metrics on many of these indicators--as well as add context from Hedgeye’s Growth-Inflation-Policy (GIP) model.
This presentation has three goals.
- First, to familiarize viewers with the variety of available indicators and with ways to assess their usefulness.
- Second, to offer our opinion on which indicators are most helpful and why.
- And third, to offer our own view on the current recession outlook.
