FAST FIVE: Here Are The Recession Warning Signs To Watch

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When the year-over-year growth rate of this index drops into negative territory, recessions typically occur shortly after.

While the current LEI slowdown hasn't dipped into negative territory yet, anyone who is interested in monitoring the risk of a recession should keep an eye out for that scenario.

Corporate earnings growth is another valuable recession indicator to watch.

As the chart below shows, the US stock market is nearly as overvalued as it was in 1929, right before the stock market crash that led to the Great Depression.

If this historic relationship is still valid, we should prepare for much higher volatility over the next few years.

Categories: ZH