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Business cycle risk remains low, according to the implied estimate of economic conditions based on an index of four key markets. The Capital Spectator's Macro-Markets Risk Index (MMRI) closed yesterday (March 21) at 12.8% -- well above the danger zone of 0% and within the 10%-to-15% range that's prevailed so far this year. When MMRI falls under 0%, recession risk is elevated. Readings above 0% equate with economic growth.

MMRI represents a subset of the market indicators in the Economic Trend & Momentum indices, a pair of benchmarks that track the economy's broad trend for signs of major turning points in the business cycle. Tracking the markets-based subset of indicators offers a real-time, market-based evaluation of macro conditions. By contrast, conventional economic data series are published with a time lag. MMRI is intended as a supplement for developing some perspective on the current month's economic trend until the formal updates are published.

MMRI is a daily average of four indicators, calculated as follows:

•U.S. stocks (S&P 500), 250-day % change
•Credit spread (BofA Merrill Lynch US High Yield Master II Option-Adjusted Spread), inverted 250-day % change
•Treasury yield curve (10-yr Treasury yield less 3-month T-bill yield), daily, no transformation
•Oil prices (iPath S&P GSCI Crude Oil Total Return Index ETN (NYSEARCA:OIL)), inverted 250-day % change

For additional information on MMRI, see this post that introduced the index. Meanwhile, Here's how MMRI compares on a daily basis since August 2007:

Here's how MMRI stacks up so far this year, through March 21:

Source: Macro-Markets Risk Index Update