{"id":63344,"date":"2025-12-06T08:19:26","date_gmt":"2025-12-06T08:19:26","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=63344"},"modified":"2025-12-06T08:19:26","modified_gmt":"2025-12-06T08:19:26","slug":"us-market-snapshot","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/12\/06\/us-market-snapshot\/","title":{"rendered":"US Market Snapshot"},"content":{"rendered":"
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\"Bull\/Bear<\/div>\n
\"Stock<\/div>\n<\/div>\n

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

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

The Bull\/Bear indicator remains at 40%, warning of a bear market ahead. Labor market data (marked in orange below) is delayed due to the recent US government shutdown.<\/p>\n

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

Heavy truck sales warn of a recession, with a steep decline to 27,900 units in November and the 3-month moving average falling to 35,400.<\/p>\n

\"Heavy<\/p>\n

The University of Michigan index of current economic conditions is at a record low since the survey started in 1960, with the 3-month moving average plunging to 53.5 in November.<\/p>\n

\"University<\/p>\n

However, a low reading for the index of current economic conditions requires confirmation from the Chicago Fed National Financial Conditions Index or the S&P 500 Smoothed Momentum (30-week).<\/p>\n

The Chicago Fed National Financial Conditions Index increased to -0.524 on November 28, indicating that monetary conditions remain loose, supporting high stock prices.<\/p>\n

\"Chicago<\/p>\n

A steep plunge in Bitcoin last week warned of a liquidity contraction, but that seems to be easing.<\/p>\n

\"Bitcoin<\/p>\n

The Treasury General Account at the Fed is still high. This removes liquidity from financial markets, but we expect a decline in December.<\/p>\n

\"Fed<\/p>\n

Stock Pricing<\/h2>\n

Stock pricing is unchanged at 98.55 percent, compared to a high of 98.66 percent in late October and an April low of 95.04 percent. The extreme pricing 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 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 that stock market pricing is relative to its historical mean, the greater the risk of a sharp drawdown.<\/p>\n

The Forward PE of the S&P 500 remains high at 25.2 times projected earnings, above its long-term average of 16.1.<\/p>\n

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

Conclusion<\/h2>\n

The bull-bear indicator at 40% warns of a bear market ahead, while extreme pricing increases the long-term risk of a significant drawdown.<\/p>\n

Acknowledgments<\/h4>\n