Today’s results of the Conference Board’s Leading Economic Indicators showed another significant monthly increase climbing 1.0% compared to August bringing the annual increase to 2.88% and leaving the index at a level of 103.5.On the face of it this is clearly a Bullish “Green Shoots” development as this series (an aggregate of 10 component leading indices) is signaling a clear shift from leading contraction to expansion though the leading index is strongly influenced by stocks (i.e. the inclusion of the S&P 500 as one of the leading indicators) and the pronounced “V”-shaped bounce coming directly on the back of such a dramatic period of decline appears suspicious.
Could we be headed into a second dip (… similar to mid-1981) as the government’s Keynesian chicanery shows itself to have only propped demand but failed to encourage real “organic” demand?
Only time will tell…
