It was reported very recently that the Conference Board's Leading Economic Indicators were up slightly for December. This helped trigger a rally in stocks. However, the LEI was created by Dr. Geoffrey Moore, who found an improved methodology, which is now used by the successor enterprise he then founded, ECRI. ECRI has a superior track record to the LEI, in my humble opinion.
The ECRI (Economic Cycle Research Institute) has released its Weekly Leading Indicator figure for the week ending Jan. 23. The W.L.I. clocked in at 107.3, down marginally from the prior week and down 24% year on year. The absolute number of 107.3 is about where this index was in the 1994-5 time frame. Considering that companies have been reinvesting in their own stocks, paying dividends, making acquisitions, and the like, it may be reasonable to ask the question of whether the absolute number of the Dow Jones Industrial Average also belongs at the level of the mid-1990s. FYI That might put it at 4000.
Let's hope not, but the action of seemingly solid companies over the past year teaches humility in ruling anything in or out.
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