The case for a global equity bear market

Our central case is that Global equities have rolled over into a cyclical bear market (as of mid-2015). There are a number of reasons driving that view (for more pls see (VIEW LINK) to attached video). One reason in particular though is the continued signal from our ‘Bear Market’ forecasting model which ticked lower in November (i.e. latest reading). This model is based upon 3 key factors, all of which we regard as critical indicators of the health of the global economy and global equity market. Those 3 factors are: the trend in the outlook for global earnings; the trend in the ISM manufacturing survey; & the trend in US high yield corporate bonds spreads. All 3 inputs represent key factors that drive bull-bear markets. Signals from this model are rare.