What Macro Indicators Predict for the Stock Market with Mike Singleton

All eyes are on the Fed these days. And for good reason, too.

There's a high degree of correlation between the stock market and the American macroeconomy. Many investors are impatiently watching Jay Powell's every move and are obsessively analyzing every word he says.

Yet the Fed's actions are actually just one piece of a much larger puzzle. Equities as a whole tend to follow a broader business cycle, which includes periods of growth, inflation, and policy that spans for several years and even decades. Each phase within the business cycle has implications for companies and also their equity shareholders.

What exactly does that mean? And what exactly are those implications for us, as investors?

To answer those questions, 7investing CEO Simon Erickson recently spoke with Mike Singleton, who's the founder and senior analyst of Invictus Research. Invictus' business cycle analysis helps retail and institutional investors make more-informed financial decisions.

Simon and Mike began the conversation by discussing the business cycle -- including what it is and how to measure it. They discussed why several leading indicators such as industrial manufacturing, CPI inflation, and the housing sector are worth monitoring to predict upcoming investing cycles. Specifically, layoffs within the manufacturing sector could indicate a shift in the business cycle -- especially is service-heavy economies like the United States.

In the second half of the conversation, Simon asks Mike if he believes the Fed will ultimately reach its stated goal of 2% inflation and what a period of lower inflation would mean. Mike believes American will, in fact, see disinflation through the second half of the year. He also predicts an uptick in unemployment rates and a high likelihood of a recession. For investors, now could be a good time to consider defensive sectors such as consumer staples and health care.

No individual publicly-traded companies were mentioned in this interview. Cryptocurrencies mentioned include Bitcoin. 7investing or its guests may have positions in the stocks or cryptocurrencies mentioned.

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