Global anchor · Amplifiers · Credit and Financial Stress
12cold
Now 0.009 | Data for Oct 2026
Hot and cold describe position, not good or bad: warm does not mean a fall is coming, and an extreme reading does not mean a quick reversal. We describe history only, with no buy or sell advice.
What it is
The ECB’s Composite Indicator of Systemic Stress (CISS), which combines volatility and co-movement across stock, bond, currency and money markets. The headline reading is for the US; the euro area, the UK and China are also shown.
A rising index signals market panic and tight funding; a low reading means calm markets.
The headline reading is for the US; lower = calmer markets.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also cold
| Regions | Percentile | Level | Data month |
|---|---|---|---|
| Euro area | 21 | cool | Oct 2026 |
| UK | 12 | cold | Oct 2026 |
| China | 0 | coldat an extreme | Oct 2026 |
When it was here before
US stocks after it began, cumulative1 yr2 yr3 yr
For each period, the changes 1, 2 and 3 years after it began are cumulative and measured from its first month; “What happened next” is measured from every cold month, so the two give different numbers. The events named beside each period are major events of that time, not necessarily related to the readings here.
What happened next
Bars: median cumulative changeEarlier months with Financial stress cold, excluding the current period (122)All months (443)
Median of the deepest drop below the starting month within the next 5 years: −1.6% for months with Financial stress cold; −4.7% for all months.
The cold months come from a small number of market episodes (7), and neighboring months are not independent events; rises and falls are all listed. This is the historical record, not a forecast. “US stocks” means the S&P 500 price index compiled by Professor Shiller (monthly average, excluding dividends).
| Median position | Back to neutral (40–60) | Still no warmer than cold | |
|---|---|---|---|
| 1 yr later | 24cool | 15% | 43% |
| 3 yr later | 31cool | 17% | 32% |
| 5 yr later | 46neutral | 20% | 24% |
Has hot or cold lined up with later returns?
1989–2021: average yearly change in US stocks over the next 5 years
There is no clear relationship between hot or cold and what came next. The gaps between the bars are not consistent across months (rank correlation below 0.25); this is a record of the past, not a forecast.
What it is linked to
Financial stresstoWorld stocksCommon explanation: Ripple · opposite direction
In a panic, the prices of risky assets of all kinds tend to fall together
This issue: Financial stress at 12 (cold), World stocks at 72 (warm) — Financial stress below normal, World stocks above normal, in line with the common explanation (this is an inverse link).
Supported by the dataAgreement +0.48 · in step in 28 of 32 5-year periods
Financial stresstoGoldCommon explanation: Ripple · same direction
In a panic, safe-haven demand flows into gold
This issue: Financial stress at 12 (cold), Gold at 84 (hot) — Financial stress below normal, Gold above normal, not in line with the common explanation.
Weak or inconsistentAgreement +0.25 · in step in 17 of 32 5-year periods
Financial stresstoUS dollarCommon explanation: Ripple · same direction
In a panic, money rushes into the dollar for safety
This issue: Financial stress at 12 (cold), US dollar at 45 (neutral) — at least one is in the neutral range (40–60), so we make no call this issue.
Not visible in our dataAgreement +0.10 · in step in 8 of 8 5-year periods
In most periods the two moved the way the common explanation says, but their highs and lows do not line up over the whole history, so overall no relationship is visible.
OFR stress and Financial stress are often linked: both measure stress in financial markets, so the same shock makes both jump. They share a common source, so we do not draw a link between them.
Bond volatility and Financial stress are often linked: both measure how fearful markets are, so the same shock makes both jump. They share a common source, so we do not draw a link between them.
Credit spread and Financial stress are often linked: both measure how fearful markets are, so the same shock makes both jump. They share a common source, so we do not draw a link between them.
Values
Data and sources