Economy and Confidence
99hotat an extreme
Now 41 points | Data for Aug 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
A score from 9 to 45 compiled by Taiwan’s National Development Council from nine indicators, mapped to five signals: blue, yellow-blue, green, yellow-red and red.
Taiwan’s most widely used thermometer for the business cycle; a red signal means the economy is booming.
9 to 45 points; 23–31 is a green signal, 38 and above a red one.
Where it stands now
coldcoolneutralwarmhotHatched = earlier periods that were also hot
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 hot 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 Taiwan cycle signal hot, excluding the current period (51)All months (393)
Median of the deepest drop below the starting month within the next 5 years: −6.7% for months with Taiwan cycle signal hot; −6.7% for all months.
The hot months come from a small number of market episodes (6), 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 hot or more extreme | |
|---|---|---|---|
| 1 yr later | 34cool | 12% | 18% |
| 3 yr later | 50neutral | 20% | 31% |
| 5 yr later | 23cool | 11% | 23% |
Has hot or cold lined up with later returns?
1993–2021: 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
Taiwan export orderstoTaiwan cycle signalCommon explanation: Knock-on · same direction
Export orders lead exports and production, and the business cycle signal follows
This issue: Taiwan export orders at 99 (hot), Taiwan cycle signal at 99 (hot) — both above normal, in line with the common explanation.
Supported by the dataAgreement +0.65 · in step in 17 of 17 5-year periods
Values
Data and sources