U.S. Money Supply Is Contracting for the First Time Since the Great Depression. Historically, This Is an Ominous Sign for Stocks.
On the surface, Wall Street offers one guarantee: unpredictability. Since this decade began, the three major stocks indexes -- Dow Jones Industrial Average (DJINDICES: ^DJI), S 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) -- have been whipsawed by two bear markets (2020 and 2022) and a period of practical euphoria (2021) that saw equities rally to all-time highs.
Although there isn't an economic datapoint or predictive indicator that can, without fail, forecast short-term movements in the Dow, S 500, and Nasdaq Composite, there are a number of these tools that have uncanny correlations with directional stock market movements. One of the most-pronounced is U.S. money supply.
Image source: Getty Images.
Source Fool.com