Owen B

Why the ECRI Is a Good Economic Indicator

A1 = I've always looked at the WLI as something to confirm cyclical moves in stocks, and that is worth a lot to me.

A2 = look at the link of a WLI vs. GDP chart that Kirk provided two comments above yours :-).

On Oct 16 08:33 AM Wildebeest wrote:

> As per instablog comment:
>
> The chart you have included clearly shows the ECRI WLI to be a coincident
> indicator at best, and on occasions a lagging indicator -- of the
> S&P at least. Therefore you can't draw anymore meaningful information
> from the ECRI WLI than you could from the S&P 500. (qualifier:
> for this data set dating back to early 01)
>
> Normally your articles are packed with data, and informative, here
> there is no data to support the title of the article.
>
> Q1. Is the ECRI WLI a leading indicator for the S&P 500?
>
> A1. Data set provided shows it isn't. It is coincident mostly but
> sometimes lagging. i.e the chart doesn't support the thrust of the
> article.
>
> Q2. Is the ECRI WLI a leading indicator for the economy?
>
> A2. Who knows. The chart I'd like to see is the ECRI WLI overlaying
> quarterly changes in GDP. That way we can see if it is a leading
> indicator of how the economy is travelling.