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Issue 1 · Late October 2026
US stocks → Business confidence
Common explanation (Ripple · same direction): Rising stock prices signal a better economy and profits, and business confidence rises.
This issue: US stocks at 94 (hot), Business confidence at 22 (cool) — US stocks above normal, Business confidence below normal, not in line with the common explanation.
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.
Hover over a pendulum or tick to see its name; click to open that indicator.Tap a pendulum or tick to see its name; tap again to open that indicator.
Where it stands now
Where the two indicators stand this issue
US stocks: 94 (84.4% above its 10-year average). Business confidence: 22 (Now 99.24).
Tests
Does this link hold up?
Common explanationRising stock prices signal a better economy and profits, and business confidence risesSource: Federal Reserve Bank of Kansas City, “Do Changes in the Stock Market Affect Consumer and Business Confidence?” (2019). The article uses the US small-business optimism index, not the OECD business confidence this site uses, and finds that confidence also helps predict stock prices.
Tested against our dataBy position (each compared with its own normal — do their highs and lows move together?): agreement between US stocks and Business confidence (3-month lag) is −0.05; across every 5-year period (shifted one year at a time), the two moved in that direction in 24 of 36.By change (how far each position moved over the past 12 months — do their swings move together?): agreement +0.26; the two moved in that direction in 28 of 35. By position: 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 over the whole history no relationship is visible.
By position24/36
By change28/35
1985–19902020–2025
Each cell is a five-year period (shifted one year at a time): filled = in step with the common explanation, outlined = out of step.●○○Weak or inconsistent
Periods when it did not holdAcross the 5-year periods (shifted one year at a time, so they overlap), the periods out of step cover — by position (36 periods): 1985–2005 and 2009–2016; by change (35 periods): 1990–2002.
Does it predict?Prediction test (a historical test, unrelated to “Where it stands now” above and not this site’s forecast): does adding the past 12 months of US stocks make Business confidence easier to predict? Result: No predictive link found (p = 0.159; the smaller, the less likely by chance). Forecasting a recent stretch of data not used for estimation, the error is 2.5% higher.○○○No link found
History
The two lines, overlaid
Data: Professor Robert J. Shiller, public data; OECD business and consumer confidence indicators. Positions: our calculation.
US stocksBusiness confidence
Limits
What this card cannot tell you
Moving together does not prove that one causes the other.
Results for every period are listed in full, including periods that did not agree.