The GDP-weighted trend in the economic data (orange line) has been relatively flat since early 2023, with a recent tilt down. Global equity prices (black line) rose until mid-February 2025. 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 lowered in April 2025, but the bounce back in equity prices in May returned stocks to being ahead of the economy.

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. The most important category is “bad getting worse,” the proportion of economic indices which are both worse than the long-term median and the prior year median, shown in red in the chart. US recessions have usually begun each time the “bad getting worse” 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 January 2024 through March 2025, but is sloping higher as of May 2025.