Category: Countries & Regions

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US Market Snapshot

Bull/Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because market valuations are high; however, we recommend exercising caution when adding new positions.

Bull/Bear Market

The Bull/Bear indicator remains at 40%, warning of a bear market ahead, with three of five indicators signaling risk-off.

US Bull-Bear Market Indicator

The Chicago Fed National Financial Conditions Index declined to -0.465 on April 10. A rise above -0.40 would signal risk-off, confirming bear signals from Fed monetary policy (rate-cut cycle) and the University of Michigan Index of Current Economic Conditions.

Chicago Fed National Financial Conditions Index

Stock Pricing

Stock pricing continued its sharp rise, reaching 95.97 percent from 91.79 percent two weeks ago.

We replaced the S&P 500 Price-to-Sales ratio and Forward Price-Earnings Ratio with similar series for the Dow Jones Industrial Index, but use a 20% trimmed mean with the new series. The trimmed mean excludes the top 10% and bottom 10% of readings to minimize distortion from outliers in the smaller population of 30 stocks.

US Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher the stock market price measure is relative to the historical mean, the greater the risk of a sharp drawdown.

Robert Shiller’s CAPE compares the S&P 500 to its 10-year average of inflation-adjusted earnings. The ratio rebounded to 39.07, almost 75% above its long-term mean of 22.38.

S&P 500 CAPE
The S&P 500 measured against the highest trailing earnings, increased to 25.7 from 23.7 two weeks ago as stocks rallied, a 49% premium relative to its long-term mean of 17.3.

S&P 500 PE of Highest Trailing Earnings

Conclusion

The bull-bear indicator at 40% warns of a bear market, while extreme pricing highlights the risk of a significant drawdown.

Acknowledgments

Notes

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ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% nine weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

NAB Forward Orders fell to -1 in March, but the 3-month moving average remains at 2.33. Values above zero signal risk-on.

NAB Forward Orders

Stock Pricing

ASX stock pricing declined to 77.79 percent, from 79.17 percent last week. The August 2025 high was 92.23 percent, with an April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

The ASX 20 Price-to-Sales ratio (20% trimmed mean) declined to 4.37 from 4.46 last week, but remains above its long-term average of 4.17.

ASX 20 Price-to-Sales 20% Trimmed Mean

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing remains high, with elevated risk of a drawdown.

Acknowledgments

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More Noise, No Signal

Key Points

  • Following the breakdown of ceasefire talks, President Trump initiated a naval blockade on Monday to pressure Iran to restore access to the Strait of Hormuz.
  • Central Command reported that nine oil tankers from Iran followed orders to turn around since the blockade began.
  • On Wednesday, Iran’s military threatened to block trade through the Red Sea if the United States continues its naval blockade.
  • The White House says the US remains “engaged” in “productive and ongoing” discussion with Iran.
  • President Trump insists the war is “close to over” and  the stock market is “going to boom.”
  • The S&P 500 makes a new high above 7000.
  • Press Secretary Karoline Leavitt says the US “feels good” about the prospect of a deal, but says no date has been set for further negotiations.
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Blockade

Key Points

  • President Donald Trump announced a US blockade on Iranian shipments through the Strait of Hormuz.
  • Closure of the Strait will restrict 20% of the global oil supply.
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US Market Snapshot

Bull/Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, and the indicator on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks because market valuations are high; however, we recommend exercising caution when adding new positions.

Bull/Bear Market

The Bull/Bear indicator remains at 40%, warning of a bear market ahead, with three of five indicators signaling risk-off.

US Bull-Bear Market Indicator

The University of Michigan Index of Current Economic Conditions fell to its lowest level since the survey started in 1960. The index signals risk-off, but still has to be confirmed by either the Chicago Fed National Financial Conditions Index or Twiggs 30-week Smoothed Momentum on the S&P 500.

University of Michigan: Current Economic Conditions

The S&P 500 30-week Twiggs Smoothed Momentum remains well above zero, signaling risk-on.

S&P 500

However, the Chicago Fed National Financial Conditions Index rose to -0.433 on April 3, indicating tighter financial market conditions. A rise above -0.40 would signal risk-off, confirming the bear signals from Fed monetary policy (rate-cut cycle) and the University of Michigan Index of Current Economic Conditions.

Chicago Fed National Financial Conditions Index

Stock Pricing

Stock pricing rose sharply to 94.01 percent from 91.79 percent last week. The fall from 98.64 five weeks ago is partly attributable to a break in the series. We replaced the S&P 500 Price-to-Sales ratio and Forward Price-Earnings Ratio with similar series for the Dow Jones Industrial Index, but use a 20% trimmed mean with the new series. The trimmed mean excludes the top 10% and bottom 10% of readings to minimize distortion from outliers in the smaller population of 30 stocks.

US Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher the stock market price measure is relative to the historical mean, the greater the risk of a sharp drawdown.

The S&P 500 PE, measured against the highest trailing earnings, improved to 24.5 from 23.7 last week as stocks rallied, but still indicates a correction. A fall below the long-term average of 17.3 would flag a potential buy opportunity.

S&P 500 PE of Highest Trailing Earnings

Conclusion

The bull-bear indicator at 40% warns of a bear market, while extreme pricing highlights the risk of a significant drawdown.

Acknowledgments

Notes

Posted on

ASX Market Snapshot

Bull-Bear Market Indicator
Stock Market Pricing Indicator

The gauge on the left indicates whether the market is in a bull or bear phase, while the one on the right reflects the current valuation of the stock market. Stock market pricing indicates whether stocks are cheap or expensive in relation to earnings, but it is a poor indicator of market timing. We do not recommend selling stocks when market valuations are high, but we advise caution when adding new positions.

Bull/Bear Market

The ASX Bull-Bear Market indicator remains at 56%, from 66% eight weeks ago. One of four Australian indicators and one of two Chinese indicators signal risk-off. When combined with the US Bull/Bear indicator, which has a 40% weighting, the composite indicator signals a mild bear market.

ASX Bull-Bear Market Indicator

The ASX 200 Financials Index broke resistance at 10,000, indicating a strong uptrend, signaling risk-on.

ASX 200 Financials Index

Stock Pricing

ASX stock pricing improved slightly to 79.17 percent, from 78.87 percent last week. The August 2025 high was 92.23 percent, with an April low of 67.85 percent.

ASX Stock Market Value Indicator

We use z-scores to measure each indicator’s current position relative to its historical data, with results expressed in standard deviations from the mean. We then calculate an average of the five readings and convert that to a percentile. The higher stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.

The ASX stock market capitalization to GDP ratio fell to 1.10 at the end of March, but is still above the long-term average of 1.02.

ASX Stock Market Capitalisation to GDP

Conclusion

The ASX bull-bear indicator at 56% signals a mild bear market, while stock market pricing continues to warn of the elevated risk of a drawdown.

Acknowledgments

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First Wave of Gulf War Hits CPI

Key Points

  • CPI jumped by almost 0.9% in March, fueled by a steep rise in crude oil prices.
  • A 21.2% jump in gasoline prices accounted for nearly three quarters of the monthly ​CPI increase.
  • We expect further waves as rising costs reach agriculture, mining, and transportation before filtering through to the broader economy.
  • The S&P 500 stalled at 6800.
  • University of Michigan consumer sentiment plunged to its lowest level since the late 1970s.

The first wave of price hikes hit CPI in March, with the index jumping 0.865%, fueled by a steep rise in crude oil prices driven by the war in the Persian Gulf.
CPI & Core CPI - Monthly

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Ceasefire Falls Apart

Key Points

  • Israel stepped up airstrikes on Hezbollah targets in Lebanon.
  • Iran’s lead negotiator says a bilateral ceasefire is unreasonable in such a situation.
  • Iran attacked Saudi Arabia’s East-West Pipeline, which bypasses the Strait of Hormuz, just hours after the ceasefire ‌was agreed.
  • The United Arab Emirates carried out air strikes on Iranian production and refining facilities. Iran retaliates with a barrage of missiles and drones.
  • Ukraine defies calls to stop striking Russian energy facilities.
  • Brent crude bids for spot delivery at $144 per barrel, but no sellers.
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Ceasefire But No Long-term Peace in Sight

Key Points

  • President Trump announced he had agreed to a two-week ceasefire with Iran.
  • Iranian Foreign Minister Seyed Abbas Araghchi confirmed that Iran will allow safe passage through the Strait of Hormuz for two weeks.
  • Brent crude futures (Jun’26) plunged to $93.86 per barrel.
  • Gold climbed to $4,800 per ounce as the Dollar weakened.

President Trump has agreed to a two-week ceasefire with Iran.

Truth Social Post

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Australian PMI Dives to Recession Levels

Key Points

  • The S&P Global Australia Composite PMI dived to 46.6 in March, from 52.4 in February.

The S&P Global Australia Composite PMI dived to 46.6 in March, from 52.4 in February. The fall below 49.0 marks our first recession warning since December 2023.

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