Market Outlook

Q3, 2023: The Running of the Bulls (and Bears)

Growth, Inflation & Policy

As of July 28, 2023

Leading Economic Indicators

  • The Conference Board’s Leading Economic Indicators (LEI) is used to forecast future economic activity. Since 1988, the U.S. LEI has dropped below zero over a six-month period on ten occasions. On five of those occasions, the LEI has dropped below -4%, signaling a recession every time.
  • In May 2021, the LEI’s six-month change dropped below zero, triggering a recession warning. In June 2022, the Index dropped below -4%. The most recent reading (June 2023) showed a further decline of 0.7%, which kept the six-month change below -4% (at -4.3%). The LEI continues to signal a looming recession.


  • June marked the one-year anniversary of inflation in the U.S. reaching a four-decade high of 9.1%. Since then, headline inflation has trended lower to 3.0%, while core inflation has stayed stubbornly high, with a reading of 4.8% in June.
  • However, despite the welcome easing of prices, inflation could tick up again towards the end of the year due to base effects, as the highest monthly readings start to fall out of the 12-month reference period.
  • Until now, it has been relatively ‘easy’ for monthly inflation readings to be lower than last year’s near-record high levels (June 2022’s month-over-month increase of 1.2% was one of the highest on record).
  • It now becomes increasingly challenging for month-over-month inflation prints to be lower than the monthly increases a year ago, making it trickier for year-over-year inflation to cool further.

For additional market insights, download our complete market outlook report.

This material is provided to advisors by Mount Yale Investment Advisors, LLC and contains market commentary from third-party sources it believes to be reliable. However, Mount Yale has not independently verified or otherwise investigated such information and makes no guarantee as to its accuracy or completeness.  In the event any of the assumptions used herein prove not to be true, results may vary substantially. All investments entail risks. Past performance is no guarantee of future results and the opinions presented cannot be viewed as an indicator of future performance.  Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested indirectly.  The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor.  It is not intended to be a client-specific suitability or best interest analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities.

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