{"id":62255,"date":"2025-08-09T02:16:02","date_gmt":"2025-08-09T02:16:02","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=62255"},"modified":"2025-08-09T02:16:31","modified_gmt":"2025-08-09T02:16:31","slug":"us-leading-indicator-slips-to-40","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/08\/09\/us-leading-indicator-slips-to-40\/","title":{"rendered":"US Leading Indicator slips to 40%"},"content":{"rendered":"
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\"Bull\/Bear<\/div>\n
\"Stock<\/div>\n<\/div>\n

The gauge on the left indicates bull or bear market status, and the one on the right reflects stock market drawdown risk.<\/p>\n

Bull\/Bear Market<\/h2>\n

The Bull\/Bear indicator declined to 40% from 60% last week, with heavy truck sales moving to risk-off:<\/p>\n

\"Bull-Bear<\/p>\n

Heavy truck sales declined to 37.1K units in July, with the 12-month moving average falling to 38.6K. Heavy truck sales are a reliable indicator of transport activity and business confidence. A decline of the 12-month MA by more than 10% from its October 2023 peak at 43K signals risk-off.<\/p>\n

\"Heavy<\/p>\n

Stock Pricing<\/h2>\n

Stock pricing climbed to a new high of 97.81 percent, compared to a low of 95.04 percent in April and an earlier high of 97.79 percent in February. The extreme reading warns that stocks are at risk of a significant drawdown.<\/p>\n

\"Stock<\/p>\n

We use z-scores to measure each indicator’s current position relative to its history, with the result expressed in standard deviations from the mean. We then calculate an average for the five readings and convert that to a percentile. The higher that stock market pricing is relative to its historical mean, the greater the risk of a sharp drawdown.<\/p>\n

The forward price-earnings ratio for the S&P 500 is close to the highest level in the last century, apart from the Dotcom bubble in 2000. The current reading of 24.5 is more than a 50% premium to the long-term average of 16.1 (since September 1974).<\/p>\n

\"S&P<\/p>\n

The S&P 500 PE is 28.6 times the highest trailing earnings, compared to 33.8 during the Dotcom bubble and a long-term average of 17.3 (since 1974).<\/p>\n

\"S&P<\/p>\n

Conclusion<\/h2>\n

The composite leading indicator signals a bear market, while extreme pricing highlights the risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n