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Current Conditions Index | Week of October 27, 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) rose 14 points to 255.

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

A falling VIX, a measure of stock market volatility, and rising retail sales were the largest contributors to the increase, while mortgage applications and business lending were a very modest drag.

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.

Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit

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