How Economy Stress Watch works

Economy Stress Watch shows 11 widely followed warning signs for the US economy and stock market in plain English. It exists so that you can understand conditions yourself, not to tell you what to buy or sell.

Reading the colors

Each indicator is Clear (green), Warning (amber) or Danger (red), based on levels that have historically come before economic or market trouble. Several reds at once matter more than one.

The overall stress level

Clear counts 0, Warning counts 1 and Danger counts 2. The total is compared with the maximum possible and sorted into Low, Moderate, Elevated or High. Indicators without data are skipped. If the Sahm rule or either yield curve is in Danger, the level is at least Elevated, because these are classic recession alarms.

Data sources

Each indicator name on the dashboard links to its free public source: the Federal Reserve Bank of St. Louis (FRED), FINRA margin statistics, and multpl.com for the Shiller CAPE. Nine of the eleven values refresh automatically from the FRED data service. Shiller CAPE and FINRA margin debt are not available there, so they are updated by hand. The date of the last update is shown at the top of the dashboard.

Limits you should know

Thresholds marked * are rules of thumb, not official cutoffs. No indicator predicts the future. A high stress level has not always been followed by a crash, and a low level does not rule one out. This is general information only and not financial advice. See the legal notice.