Business Cycle

Markets move in cycles because economies do. This dashboard mirrors Fidelity’s Business Cycle Update framework — a multi-indicator, multi-economy read on where each major region sits across the four cycle phases: Early, Mid, Late and Recession. The composite score for each economy blends fundamentals (growth, inflation, employment, policy) with market-derived signals (yield curve, credit spreads, equity momentum) into a single 0-100 read with a phase label and a direction of travel.

• Early — recovery from recession. Growth reaccelerates, policy is loose, credit reopens. Historically the most rewarding phase for cyclicals, financials, real estate and small caps.
• Mid — the long expansion. Growth peaks and plateaus, policy normalises. Tech, communication services and capex-leveraged industrials lead; pullbacks tend to be bought.
• Late — growth decelerates from above-trend, inflation pressures peak, policy turns restrictive. Energy, materials, staples and health care take leadership; high-multiple growth and discretionary lag.
• Recession — contraction. Earnings fall, credit tightens. Defensives (staples, utilities, health care) and long-duration bonds outperform; cyclicals, financials and industrials underperform.

• Growth — real GDP YoY and industrial production YoY (US via FRED; other economies via World Bank annual data). Higher = early/mid; decelerating from a high = late; negative = recession.
• Inflation — headline CPI YoY. Low and rising = early; rising = mid; peaking = late; falling from a high = transitioning out of late toward recession.
• Employment — unemployment rate level + direction of change. Falling = early/mid; flat low = mid; rising = late/recession transition.
• Yield curve — 10-year minus 2-year US Treasury spread (bps). Steep positive = early; flattening = mid; flat or inverted = late; deep inversion re-steepening = recession leading-edge.
• Monetary policy — fed funds rate level + direction. Cutting = recession/early; flat low = early; flat or hiking = mid/late; pause from peak = late.
• Credit spread — HYG/LQD ratio YoY change. Widening = late/recession risk; tightening = early/mid risk-on.
• Equity momentum — regional benchmark YoY price change. Strong + accelerating = mid; strong + decelerating = late; negative = recession.

• Central bank radar — a standard Taylor rule (r* + π + 0.5(π−2) + (u*−u)) computed from the same live CPI, unemployment and policy-rate data shown above, per bank. The gap between the actual rate and the rule is the objective read on stance — a bank sitting far above the rule with cooling inflation has a data-driven cutting bias, whatever its rhetoric says.
• Relative strength scoreboard — all seven economies ranked head-to-head with equity momentum in USD terms (so a rally that's really just currency depreciation doesn't score), currency strength, and cycle trajectory. Top two rank Overweight, bottom two Underweight — a news-flow-independent answer to which economies deserve the deep dive.
• US high-frequency pack — weekly initial jobless claims (the earliest recession warning), daily 10-year breakeven inflation (the expectations gauge the Fed itself watches), weekly Chicago Fed financial conditions, monthly retail sales and housing starts. The US read updates weekly, not monthly.

Each phase has a historically reliable sector leadership pattern. The dashboard surfaces the current phase’s overweights and underweights for the selected economy — a starting point for allocation, not a trade signal. These are framework defaults derived from the Fidelity research and adapted; specific position sizing should always reference current Motion and Time pillars as well.

Data is pulled live on each revalidation. US fundamentals (GDP, CPI, unemployment, industrial production, fed funds, yield curve) come from the Federal Reserve Economic Data API (FRED). International fundamentals come from the World Bank Open Data API. Market signals for all economies (equity momentum, credit spreads) come from Yahoo Finance. Each indicator is z-scored against its own history, mapped to a best-fit cycle phase via a rules table, and averaged into the composite score. The page revalidates every 6 hours.

This is the widest lens in Space. It sets the regime every position inherits. Motion may find a structurally cheap asset and Time may offer a clean entry, but if the cycle says defence, the size and conviction behind that trade should reflect it. Pair the phase read with the seasonality and astrology tools for a complete Space view; pair it with the screener and COT for the cross-check against positioning.