1. Volatility Index (VIX): It measures fear, stress, and risk in the market based on S&P 500 options. High VIX values indicate increased volatility and potential price declines. Values below 20 suggest stability and lower stress levels. Values above 30 suggests that there is increased volatility in the market. This heightened volatility is often associated with greater uncertainty, risk, and fear among investors. It indicates a potential decline in S&P 500 prices.
2. Unemployment Rate: Rising unemployment rates can signal an economic downturn. Significant job losses and increased layoffs may indicate a weakening economy.
3. GDP Contraction: It refers to a decline in a country's economic output, as measured by gross domestic product (GDP). It indicates an economic downturn and is often associated with recessions, leading to reduced employment, economic output, and consumer demand. Typically, a recession is recognized when GDP declines for two consecutive quarters.
4. Inverted Yield Curve: It has proven to be a highly reliable indicator of recessions. It occurs when long-term interest rates fall below short-term rates, An inverted yield curve is often seen as a warning sign of potential economic weakness or recession. It suggests that investors have a pessimistic view of the future and are demanding higher yields on long-term bonds compared to short-term bonds. This can indicate a lack of confidence in the economy's prospects and expectations of lower future interest rates.
Treasury Yield 10 Years
