Combines five economic indicators into a single -100 to +100 score. Positive scores indicate bullish conditions; negative scores indicate bearish conditions.
Formula
Score = Σ(Indicator Score × Weight) / Σ(Active Weights)Methodology
The economic sentiment score aggregates multiple macro indicators to provide a holistic view of economic conditions.
Component weights (default): - VIX (Fear Gauge): 30% - most responsive to market stress - CFNAI (Economic Activity): 25% - broad economic health - Consumer Sentiment: 15% - forward-looking spending indicator - Yield Curve: 15% - recession predictor - OECD Leading Index: 15% - composite leading indicator
Each indicator is normalized to a -100 to +100 scale: - CFNAI: 0 = trend growth, positive = expansion - Consumer Sentiment: 80 = neutral baseline - VIX: Inverted (low VIX = bullish, high VIX = bearish) - Yield Curve: Positive spread = healthy, inverted = recession warning - OECD CLI: 100 = neutral, above = expansion
The composite score provides a quick read on overall market conditions.
How to Interpret
| Range | Label | Meaning |
|---|---|---|
| ≥ 60 | Very Bullish | Strong positive economic signals across indicators |
| 30 to 60 | Bullish | Generally positive economic conditions |
| -30 to 30 | Neutral | Mixed signals - no clear directional bias |
| -60 to -30 | Bearish | Generally negative economic signals |
| < -60 | Very Bearish | Strong negative signals - potential recession risk |
Data Source
FRED (Federal Reserve Economic Data): CFNAI, Consumer Sentiment, VIX, Yield Curve (10Y-2Y), OECD Leading Indicator.
Reference
Federal Reserve Economic Data (2024). Economic Indicators. FRED Database - Federal Reserve Bank of St. Louis
Limitations
Economic indicators are backward-looking and may not predict future market performance. Sentiment scores should be one input among many in investment decisions.
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For Educational Purposes Only
This analysis is not investment advice. Results are based on simplified models using historical data. Past performance does not guarantee future results. All investments carry risk of loss. Consult a qualified financial advisor before making investment decisions.