So where is the recession? The PMI and LEI say watch-out

There are two classic leading indicators for recession from real economic data. One, the NAPM PMI reading suggests a recession and/or a significant slowdown if the value of the index is below 50. Two, the Conference Board LEI index is falling consistently on a year-over-year basis. 

In the case of the PMI, we have been below 50 for over a year with the current reading again turning lower at 46.7. The Conference Board leading economic indicator index topped in early 2022 and has been falling ever since. By these measures, we should see a marked decline in risk-on assets, yet 2023 has been a positive year. Being early to a recession trade has not been helpful.