Market Volatility Got You Down? This Indicator Shows Business Strength at 14-Year High!

Amidst all of the nerve-wracking market volatility in recent days, some good therapy may be to refocus on business fundamentals and the state of our economy. Refer to the chart below.




I come across many business and economic indicators in the course of my investment and financial market research, but I find the Goldman Sachs Analyst Index (GSAI) shown above to be one of the most comprehensive.

The indicator encompasses sales and shipments, orders, inventories, output prices, exports, wages and labor costs.

Similar to the more familiar government’s purchasing managers index, a score above 50 signals expansion, while a score below 50 indicates contraction.

As seen, we are at a 14-year high on this indicator, eclipsing the prior peaks in 2011 and 2018.  And we are clearly above the level just prior to the COVID-19 pandemic in February and March of last year.

Core economy

In fact, if you delve into the tabular data that supports the above chart, which I will not bore you with here, important subcategories like “Companies’ sales and shipments” are scoring over 90 and “Raw material prices” are at around 80, both very high scores and well above the critical 50 level.

In my view, this is all reflective of very solid strength for the state of business in the U.S. currently. The question of how much of this is already sufficiently reflected in the financial markets is a different topic for another article.

Suffice it to say, there is core strength in the U.S. economy at the present time.

The economy is alive and well folks. When we go through extreme market gyrations like we have just witnessed in recent days, it often helps to remind ourselves of this important fact.

Onward and upward!

Recommended Articles

Online Loan Companies Are No Easy Fix for Desperate Borrowers

If there is one thing that most Americans need right now, its more money. Online loan companies know this — and it's dangerous for many of us. Since the financial

investing in a volatile market

Investing in a Volatile Market for Long-Term Gains

Investing in a volatile market gives everyone the jitters. Novices, in particular, tend to sell in a panic and then wait for the right time to re-enter the market. Selling

Legumes: Nutrient Dense and Delicious, but Watch for These Preventable Side Effects

Legumes: Good or bad for you? The answer is, a little of both. And at the end of the day, what really matters is how your unique body feels when

4 Keys to Successful Retirement Planning

Retirement planning gives you the freedom to live life to the fullest. You can afford to have all the necessary comforts and amenities of life, go on a vacation occasionally,

Do Seniors Need Life Insurance Coverage?

Do seniors need life insurance coverage? Your golden years should be about enjoying the memories of one’s lifetime. Yet the reality of life is that we struggle to pay our bills

Better Investment Than a Casino? Probably a Fitness Club

We all aspire to be healthier. Who doesn’t aspire to lose weight and exercise more as an annual New Year’s resolution? Yet well-intentioned aspirations and actions are not the same

Top 7 Job Interview ‘Don’ts’ to Remember

Preparing for a job interview can be stress-inducing. Job interview tips and tricks are all over the Internet, but few of them share the things you should absolutely not do.

Ward Off Cancer and 11 Other Things This Asian Plant Can Do for Your Health

Recently, noni has been gaining popularity, and is often promoted as a plant that has a wide range of health benefits. Noni is a small evergreen native to the Pacific

Will Stocks Just Keep Going Up? Evidence Suggest It’s Possible

Are we in in a stock market bubble? One major brokerage house recently published an in-depth report on this very topic. It looked at a multitude of previous stock market

Why Renting vs. Owning in Retirement Might Be Better

Most retirees live on fixed incomes and have limited savings, so renting vs. owning in retirement is a real debate. Home ownership and maintenance, especially during the retirement years, can

5 Ways to Make Money by Investing in Farmland

Real estate, mutual funds, bonds, and stocks are popular investment opportunities. It is smart if you are focused on all or some of these investments, but you might be ignoring

Your Heartburn Medicine Might Give You a Heart Attack

The symptoms of heartburn can make you feel like your heart is on fire, but taking medication to soothe it may put you at a higher risk for a heart

Avatar

Gary has more than 30 years of industry experience, which includes research analysis and portfolio management for both retail and institutional accounts. He worked as a Senior Vice President at Wells Fargo Advisors and Wells Fargo Investment Institute for approximately 14 years in total, where he was a senior portfolio manager for both equity and asset allocation portfolios. He was also involved in investment manager due diligence and selection for the firm’s multi-manager portfolio models. Prior to joining Wells Fargo, Gary held senior-level investment management positions with several registered investment advisory organizations. He has been a Chartered Financial Analyst (CFA®) charter-holder since 1989. The CFA is a professional credential earned by investment management professionals after successfully passing three years of rigorous examinations and recording several years as a practising professional within the industry. Gary received his Bachelor of Science in Engineering from Purdue University and his M.B.A. in Finance from The University of Missouri. Additionally, Gary holds his FINRA SIE, Series 7 and Series 66 securities registrations as well as his Missouri Life Accident & Health insurance license. He is a member of the CFA Society of St. Louis and the Financial Executives Networking Group. He resides in Kirkwood, MO with his wife Kathy, and they have three adult age children, Aly, Ryan and Josh.