Given how long the bull market have been, and how long we been waiting for a recession, there is a case that we are near the tail-end of an economic cycle.
But the data from DataTrek make a case that we might be in a middle of the economic cycle than late.
Here is what is presented in DataTrek Research’s episode on The Compound show.
What you are seeing is the Atlanta Fed model of where GDP is going. The blue area shows where the analyst expects the GDP to hover around. The green line shows the Atlanta Fed’s estimate, which shows that the data bounced around the bottom of the 2% range. If the number is kept within the 2-3% range, the economy is actually healthy. The greenline seems to show that we are having better data due to better retail sales numbers recently.
Nowhere near a pessimistic range.
Gasoline Demand
Datatrek helps its clients track the gasoline demand every week.
The US uses roughly 9.5 million barrels of gasoline. Tracking this allows us to see the health of the economy because to get somewhere, you got to drive to somewhere. The brown line shows the demand last year across the year and the blue line shows the current year.
Current demand is soft but after July the blue line went above the brown line, indicating that the economy is not great but actually doing better with gasoline prices down.
“It is very difficult to have a recession when gas prices are declining. History just shows that.”
The VIX
This chart shows that the monthly VIX readings, which is the implied volatility of the S&P 500, going back to the 1990s:
The average VIX is 19.5. A mid-cycle market