July 2026

The GDP-weighted trend in the economic data (orange line) has been mostly flat since early 2023.  It dipped temporarily due to the impacts of the conflict with Iran and then recovered to pre-war levels.  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 July 2026, the disconnect has been narrowing, with stock market momentum slowing while the economic data improved modestly.

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 no recession and the economic data improved.  The “Bad Getting Worse” cohort was declining steadily (economic picture improving) from mid 2025 through February 2026.  The war has led to a jump in the metric back to the 30% – 35% range.