January 2026

The GDP-weighted trend in the economic data (orange line) has been mostly flat since early 2023 but has recently begun to improve. Typically, the trend in the economic data and stock market returns will converge over time. There has been a disconnect, with the stock market outperforming the economy. As of January 2026, the disconnect remains but has diminished somewhat, given the improvement in the economic data trend.

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 was close to 30% from January 2024 through December 2025, but has fallen to 25% in January 2026, meaning the risk of an imminent recession is low.