{"id":63411,"date":"2025-12-20T05:27:49","date_gmt":"2025-12-20T05:27:49","guid":{"rendered":"https:\/\/thepatientinvestor.com\/?p=63411"},"modified":"2025-12-20T05:27:49","modified_gmt":"2025-12-20T05:27:49","slug":"us-market-snapshot-3","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2025\/12\/20\/us-market-snapshot-3\/","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 indicator on the right reflects the current stock market valuation. 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 market valuations are 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. One labor market data indicator (highlighted in orange below) remains delayed due to the recent US government shutdown.<\/p>\n

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

Employment in cyclical sectors has declined by 111,000 from its February peak of 27,824,000. A decline of 300,000 would trigger a recession warning. Cyclical sectors \u2014 Manufacturing, Construction, Transportation, and Warehousing \u2014 account for less than 20% of the total workforce but typically experience most job losses during a recession.<\/p>\n

\"Cyclical<\/p>\n

The University of Michigan consumer survey reported the lowest index value ever recorded for current economic conditions since the survey began in 1960.<\/p>\n

\"University<\/p>\n

However, the stock market remains buoyant and has not yet confirmed the bear signal.<\/p>\n

Stock Pricing<\/h2>\n

Stock pricing increased slightly to 98.50 percent from 98.48 percent last week, close to its high of 98.66 percent in late October and well above the low of 95.04 percent in April. 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 stock market prices are relative to their historical mean, the greater the risk of a sharp drawdown.<\/p>\n

The S&P 500 Forward Price-Earnings ratio is at 25.0, compared to the historic high of 28.0 during the Dotcom bubble and a 50-year moving average of 16.3. Before the 1999\/2000 Dotcom bubble, the forward PE had never risen above 20.0 over the preceding century.<\/p>\n

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

Conclusion<\/h2>\n

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

Acknowledgments<\/h4>\n