U.S. economic momentum weakened in August, according to today’s update of the Chicago Fed National Activity Index (CFNAI), a weighted average of 85 indicators. But the weakness fell short of signaling that a recession started, a warning that requires a reading of -0.70 or below for the CFNAI’s three-month moving average. As of August, the index’s three-month average is -0.47, down from -0.27 in July. There’s weakness in the trend, but it’s not yet fatal.

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The global economy may be struggling, but bullish sentiment in the capital and commodity markets prevails. All the major asset classes via our list of ETF proxies are sitting on tidy gains over the last several weeks. Ditto for the year so far through September 21. Red ink, in other words, is nowhere in sight these days.

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