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Current Conditions Index | Week of October 13, 2014

How to Use the CCI

The CCI is a weekly measure of the conditions that underpin our outlook for the markets and economy. It provides real-time insight into the trends that shape our recommended actions to manage portfolios and has proven to be a useful investment decision-making tool.

This index is not intended to be a leading index or predict future conditions; it is a coincident measure of where they are now. Because our index is tailored to the current environment, the components of the CCI are periodically changed to retune the index to those factors most critical to the markets and economy, so it may continue to be a valuable investment decision-making tool.

How the Index Is Constructed

To create the index we found 10 indicators that provided a weekly, real-time measure of the conditions in the economic and market environment. We then standardized these components compared with their pre-crisis 10-year average, equally weighted their standardized scores, and aligned the resulting index with zero at the start of 2009. These components capture how the conditions are evolving from a wide range of angles.

Over the past week, the LPL Financial Current Conditions Index (CCI) fell 13 points to 249.

While the CCI has shown some downward movement since its June 2014 multiyear high, it still sits at the peak levels established between the Great Recession and the end of 2014’s unusually cold and snowy weather. It remains consistent with the U.S. economy emerging from the modest, but steady, economic growth of recent years.

During the last week, a rise in the VIX, a measure of equity market volatility, contributed most to the decline, while jobless claims made the largest positive contribution.

Click here to view the LPL Financial Research Current Conditions Index publication.


The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

The fast price swings of commodities will result in significant volatility in an investor’s holdings.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

This research material has been prepared by LPL Financial.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and makes no representation with respect to such entity.

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