Regime scorecard
Late-cycle composite at 48/100; bear-led curve steepening is the swing factor. The bear-case framing is the priority: weakening breadth and the first negative earnings-revisions print in six months pull the composite lower. Confidence at 62/100 reflects model disagreement — the appropriate response is a wider implied fair-value band, not a tighter one.
The regime read
A single 0–100 score across five regime bands, with the implied composite fair value as a range. The needle is the composite; the band names are the verdict.
Market regime
Fair value is published as a range, never a point. A wide band with low confidence is information; a single number that hides which one you are reading is not.
Seven sub-components
Equal-weighted into the composite. Equal weights are deliberate: weighting by perceived informativeness would back-fit to the most recent regime.
| Component | Score | Δ MoM | Rationale |
|---|---|---|---|
Yield curve | 38 | ▼ | 10y–2y has steepened 38 bps month-over-month, but the move is bear-led — long-end real yields up, short-end flat. Historically a worse setup for risk than a bull-led steepener. |
Earnings revisions | 41 | ▼ | First negative cap-weighted Q3 revision print in six months. Industrials and Materials drove it; Technology revisions remain positive but decelerating. |
Credit spreads | 56 | → | IG spreads steady at 102 bps; HY spreads widened 24 bps but remain inside the 5-year median. No stress signal yet. |
Market breadth | 35 | ▼ | 47% of S&P 500 names above 200d MA, down from 62% a month ago. Five mega-caps account for 71% of YTD index return. |
Positioning & sentiment | 58 | ▼ | AAII bull-bear spread compressed to +4 from +18; CFTC speculative net-long S&P futures down two standard deviations off the trailing-12m peak. |
Valuation | 44 | → | Index forward P/E at 21.4×, top quintile of 10-year history. Equal-weight forward P/E at 17.1× is closer to median, underscoring the dispersion problem. |
Macro surprise | 52 | ▼ | Citi US Surprise Index rolled over 6 weeks ago and is now negative. Labour data continues to print solid; everything else is softening. |
The rest of the outlook
The composite is one lens. Read it alongside breadth, valuation dispersion and sector rotation. Read the full methodology for the underlying definitions.
Composite risk-on / risk-off read across trend, credit and volatility.
Participation beneath the index — how many names carry the move.
How widely valuations are scattered — and where the cheap pockets sit.
Where relative strength is flowing across the eleven GICS sectors.