Recession & Market-Peak Dashboard

RECESSION

FROTH

TREND

OVERALL READ

Economy calm · Froth moderate · Uptrend intact · stay invested, stay disciplined

No recession signal, trend healthy, sentiment not stretched.

Lens 1 · Recession risk: BENIGN. Yield curve, Sahm Rule, credit spreads, ISM and the LEI drive this call. Red on any core signal escalates the whole read.

Lens 2 · Market-peak froth: 41% of signals triggered. Built from public data. High froth alone rarely ends a bull.

Lens 3 · Price trend: BENIGN. Uptrend intact: 50-day above 150-day, both rising. This is the act trigger: a trend break alongside high froth is the historic sell signal.

WHAT HAPPENED NEXT · 55-YEAR BASE RATES

Every month since 1971 classified into four regimes using only real-time data. Highlighted row = the regime you are in now.

NBER recessionStrips: per-month econ, trend, and combined regime status

Regime	Months	3m med	6m med	12m med	12m positive	12m worst
Econ calm · Trend up ← now	263	+2.7%	+5.1%	+10.9%	78%	-37.5%
Econ calm · Trend down	79	+4.2%	+5.9%	+12.0%	84%	-17.3%
Econ stressed · Trend up	204	+2.5%	+4.9%	+10.4%	77%	-39.5%
Econ stressed · Trend down	119	+1.2%	+2.4%	+12.2%	65%	-44.8%

Within calm-economy uptrends, months with the froth proxy ON saw a median 12m forward return of +10.6% (n=201) vs +13.9% (n=54) with it OFF.

Regime rules use fewer signals than the live lenses so history is honest (see glossary). Forward windows overlap month to month; these are descriptive base rates, not statistical tests. Price returns only, no dividends.

LENS 1 · RECESSION-RISK DASHBOARD

Leading & coincident indicators of an economic downturn.

Benign / no signal Watch / mixed Elevated risk

Yield Curve (10yr − 3mo)

Best-documented predictor: inverted before every U.S. recession since the 1960s, 12 to 18mo lead.

+0.69%

NORMALIZED

Sahm Rule (jobs momentum)

Fires when 3-mo avg unemployment rises 0.5pt off its 12-mo low. Caught every recession start since 1970.

0.07

TRIGGER 0.50

High-Yield Credit Spreads (HY OAS)

Cleanest market stress gauge; blows out into downturns. So tight now it borders on complacency.

~2.7%

HISTORICALLY TIGHT

ISM Manufacturing PMI

Below 50 = contraction. Expansion. Latest: June 2026.

53.3

EXPANSION

Conference Board LEI

Level 99.3 (May 2026); 6-mo change -0.3%.

99.3

IMPROVING

Labor Market (unemployment / payrolls)

Solid headline but internals softening: long-term unemployed +524k YoY.

4.2%

SOLID

Valuation (Shiller CAPE)

Not a timing tool: predicts weak long-run returns. Near dot-com territory.

~42

STRETCHED

LENS 2 · MARKET-PEAK FROTH · PUBLIC-DATA GAUGES

A signal is triggered when it shows the euphoria or complacency typical of market tops.

In line with levels typically seen at prior market peaks. See the base-rate table above for what froth has and has not meant historically. Watch Lens 3 for the trigger.

Consumer Confidence > 110

Conference Board confidence index

91.2

Not yet

Retail Euphoria

AAII bull minus bear sentiment survey

31.4% bulls

Not yet

Manager Bullishness

NAAIM active-manager equity exposure

84.7

Not yet

Growth-Expectation Froth

S&P 500 forward P/E percentile

~22× · 81th pct

Not yet

Deal & IPO Froth

IPO run-rate vs prior 3 years (M&A not included)

213 YTD · ~411/yr pace

Triggered

Rule of 20 (P/E + CPI)

Trailing P/E + YoY inflation

36.6 · well > 20

Triggered

Vol Complacency

VIX spot below 14

15.6

Not yet

Value vs Growth (6m)

Value vs growth leadership (RPV vs RPG)

Growth +24% 6m

Triggered

Inverted Yield Curve

10yr minus 3mo Treasury spread (FRED)

+0.69%

Not yet

Credit Complacency

Chicago Fed NFCI financial conditions

−0.52 (loose)

Triggered

Tightening Credit (SLOOS)

Fed Senior Loan Officer Survey

net tightening

Watch

Froth % across runs 2026-07-04 → 2026-07-08

LENS 3 · PRICE TREND

50-day vs 150-day simple moving average, daily candles.

Benign SPX 7,459 · 50d 7,417 · 150d 7,033

Uptrend intact: 50-day above 150-day, both rising.

S&P 500 (last 250 sessions)50-day SMA150-day SMA

DATA PROVENANCE & FRESHNESS

Yield curve 10y-3m	FRED T10Y3M	auto	2026-07-07
Sahm rule	FRED SAHMREALTIME	auto	2026-06-01
HY OAS	FRED BAMLH0A0HYM2	auto	2026-07-06
NFCI	FRED NFCI	auto	2026-07-03
VIX	FRED VIXCLS	auto	2026-07-06
SLOOS net tightening	FRED DRTSCILM	auto	2026-04-01
Unemployment	FRED UNRATE	auto	2026-06-01
CPI YoY	FRED CPIAUCSL	auto	2026-05-01STALE 68d
S&P 500 daily	yfinance/Stooq + csv cache	auto	2026-07-08
RPV/RPG 6m	yfinance RPV / RPG	auto	2026-07-08
ISM Manufacturing PMI	gnews->prnewswire / dbnomics	auto	2026-06-01
Conference Board LEI	conference-board.org	auto	2026-05-18STALE 51d
Consumer Confidence	conference-board.org	auto	2026-06-26
Forward P/E (computed)	spglobal xlsx / WSJ P/E page	auto	2026-07-07
Deal & IPO froth	stockanalysis / nasdaq api	auto	2026-07-08
Shiller CAPE	multpl.com/shiller-pe	auto	2026-07-08
Trailing P/E	multpl.com/s-p-500-pe-ratio	auto	2026-07-08
AAII sentiment	aaii.com sentiment.xls	auto	2026-07-02
NAAIM exposure	naaim.org workbook	auto	2026-07-01

WHAT EACH SIGNAL MEANS

Lens 1: recession risk

Yield Curve (10yr − 3mo)

Gap between long and short Treasury yields. Inversion has preceded every U.S. recession since the 1960s with a 12 to 18 month lead.

Sahm Rule

Fires when the 3-month average unemployment rate rises 0.5pt above its 12-month low. Caught every recession start since 1970 with few false alarms.

High-Yield Credit Spreads (HY OAS)

Extra yield demanded to hold junk bonds. Cleanest market stress gauge; blows out into downturns. Extremely tight spreads signal complacency.

ISM Manufacturing PMI

Purchasing managers survey. Above 50 = expansion. Sustained sub-47 readings accompany recessions.

Conference Board LEI

Composite built to lead the cycle by about 7 months. Scraped from CB's own release text. Status uses the plain 6-month % change as CB quotes it: green above 0, watch to -2%, red below -2%.

Labor Market

Unemployment and job growth lag the cycle but confirm a downturn once underway. Watch the internals, not just the headline.

Shiller CAPE

Price over 10-year inflation-adjusted average earnings. Predicts weak long-run returns but does not time tops; markets stay expensive for years.

Lens 2: market-peak froth

Consumer Confidence > 110

Conference Board index. Readings above 110 reflect household optimism often seen near tops.

Retail Euphoria (AAII)

Bullish minus bearish individual investors, weekly. Extreme bullishness is a contrarian warning: when everyone is optimistic the buyers are already in.

Manager Bullishness (NAAIM)

Active managers' actual equity exposure, 0 to 100+. Near 100 means all-in with no cash left to add.

Growth-Expectation Froth (Forward P/E)

Computed as SPX divided by the next-12-month operating EPS estimate from S&P Global's public workbook. Percentile is vs an approximate 1999-2025 forward P/E history embedded in the script.

Deal & IPO Froth

Automated from the US IPO count run-rate (annualized YTD pace vs the prior three full years, via stockanalysis.com). M&A volume is not included; set deal_ipo_override in the script to force the signal on M&A judgment.

Rule of 20 (P/E + CPI)

Trailing P/E plus inflation. Above 20 has historically signalled overvaluation.

Vol Complacency (VIX)

Spot VIX below 14 means options markets are pricing very little risk: hedges are cheap and complacency is high.

Value vs Growth (6-month)

Growth leading value signals late-cycle speculation. Value leading eases this signal.

Inverted Yield Curve

Included here too: inversion is a classic macro signpost on the way to a peak.

Credit Complacency (NFCI)

Chicago Fed index. Negative = looser-than-average conditions = the complacency that often precedes turns.

Tightening Credit (SLOOS)

Fed loan-officer survey. Rising net tightening means credit is getting harder to get.

Lens 3: price trend

50-day vs 150-day SMA (daily)

A genuine bear signal needs the 50-day to cross below the 150-day AND both to flatten or turn down. Until then the uptrend is intact.

Regime engine and base rates

Regime classification

Every month since 1971 is classified with only real-time data: econ = green unless Sahm ≥ 0.33 or NFCI > 0 or curve inverted (red if Sahm ≥ 0.5 or NFCI > 0.5); trend = 50d vs 150d SMA. This deliberately uses fewer signals than the live lenses so the base rates are honest.

Base rates

Forward S&P returns from every month in each regime. Observations overlap month to month, so treat these as descriptive base rates, not statistical tests.

Froth proxy

For history, froth = NFCI below −0.40 with a positive yield curve. This is a proxy: sentiment surveys do not extend cleanly to 1971.