22 JANUARY 2026
It’s safe to assume that the three year equity bull market would likely end if a US recession emerges in 2026.
As things stand, that is not a core scenario.
The ISM recession indicator combines various forward-looking components of the monthly purchasing manager survey to project how the US economy is likely to fare over the coming months.
The indicator is currently (just) rising, which argues against there being a near-term recession.
The metric is heading higher because manufacturing orders are inching up and inventories are grinding down. In other words, the fundamental backdrop is gradually improving.
Providing demand holds up, industrial firms will be encouraged to employ more workers and boost production levels; trends that typically emerge before an acceleration in GDP growth.
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