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January 1, 2018 | No Financial Stress

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.
As we head into 2018, the St. Loius Fed reports there is no financial stress.

The STLFSI measures the degree of financial stress in the markets and is constructed from 18 weekly data series: seven interest rate series, six yield spreads and five other indicators. Each of these variables captures some aspect of financial stress. Accordingly, as the level of financial stress in the economy changes, the data series are likely to move together.

The average value of the index, which begins in late 1993, is designed to be zero. Thus, zero is viewed as representing normal financial market conditions. Values below zero suggest below-average financial market stress, while values above zero suggest above-average financial market stress.

Financial Stress 1994-Present

Financial stress has been negative since June 18, 2010. I expect 2018 will not be so complacent.

MIke “Mish” Shedlock

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January 1st, 2018

Posted In: Mish Talk

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