The GDP-weighted trend in the economic data (orange line) ha been relatively flat since early 2023, while global equity prices (black line) rose. Typically, the trend in the economic data and stock market returns will converge over time. There had been a disconnect, with the stock market outperforming the economy. This disconnect closed in the first quarter of 2025, with stock prices falling to better align with economic growth.

The chart below shows the distribution of the global economic data tracked by Atlas Capital Advisors. Each economic index is assessed as “good” or “bad” based on how it compares with the entire past history of the index. The index is also categorized as “getting worse” or “getting better” based on how it compares to the most recent twelve months. As of March 2025, 46% of the economic indices we track are “getting worse,” either “bad getting worse” (32% of data, in red) or “good getting worse” (14%, in blue). The proportion “good” is 41%, with 59% of data in the “bad” category. US recessions have usually begun each time the “bad getting worse” (red) proportion reaches 50%. That level was breached in late 2022, but there was not a recession. The “Bad Getting Worse” cohort has been steady between 30% and 35% for the past fifteen months.