A Coincident Economic Activity Index above 0.2 indicates the US recovery is on track. Produced by the Philadelphia Fed, the index includes four indicators: nonfarm payroll employment, the unemployment rate, average hours worked in manufacturing, and wages and salaries. Bellwether stock Fedex also suggests rising economic activity.
But contraction of the ECB balance sheet by € 1 Trillion over the last two years has pitched Europe back into recession.
Chart: ECB (Eurosystem) balance sheet. The target is to raise it by EUR 1 trillion – pic.twitter.com/ptoqLkNpxq
— SoberLook.com (@SoberLook) September 27, 2014
Weakness in Europe and Asia has the capacity to retard performance of US stocks despite the domestic recovery.