BFCIUS:IND — Bloomberg United States Financial Conditions Index

The Bloomberg U.S. Financial Conditions Index is considered an accurate gauge of the overall conditions in U.S. financial and credit markets. It combines yield spreads and indices from U.S. Money Markets, Equity Markets, and Bond Markets into a normalized index. The values of this index are Z-scores, which represent the number of standard deviations that current financial conditions lie above or below the average of the January 1994-June 2008 period.

BFCIUS (3 Year Chart)

The highest level for the BFICUS index in the last three years was recorded around 07/04/2013.  On that date, it showed a positive sign that financial markets were on very solid ground.  After that date, however, BFCIUS index has gradually declined to a recent trough seen on 01/20/2016.

SPY (3 Year Chart)

Even the overall conditions in U.S. financial and credit markets has gradually descent to a recent trough in Jan., 2016, the US stock market overall still performed relatively well.  Does this bull market have more legs?  Only time can tell.

References

1. BFCIUS:IND (Bloomberg)
2. Stockchart.com
3. Bloomberg financial conditions index closes at record high
4. Chicago Fed National Financial Conditions Index (NFCI)
• A composite index based on 100 different financial indicators, and has proven to be a highly accurate leading indicator of financial stress at horizons of up to one year. 
5. Three Fed Indexes Are Pointing to the Tightest U.S. Financial Conditions Since 201
6. Cleveland Financial Stress Index
7. A hedge fund manager shares the 10 things that could surprise the market this year (good)
8. St. Louis Fed Financial Stress Index