Current Conditions Index | Week of January 6, 2014
How to Use the CCI
The CCI is a weekly measure of the conditions that underpin our outlook for the markets and
economy. It provides real-time insight into the trends that shape our recommended actions to
manage portfolios and has proven to be a useful investment decision-making tool.
This index is not intended to be a leading index or predict future conditions; it is a coincident
measure of where they are now. Because our index is tailored to the current environment, the
components of the CCI are periodically changed to retune the index to those factors most critical
to the markets and economy, so it may continue to be a valuable investment decision-making tool.
How the Index Is Constructed
To create the index we found 10 indicators that provided a weekly, real-time measure of the
conditions in the economic and market environment. We then standardized these components
compared with their pre-crisis 10-year average, equally weighted their standardized scores, and
aligned the resulting index with zero at the start of 2009. These components capture how the
conditions are evolving from a wide range of angles.
Over the past week, the LPL Financial Current Conditions Index (CCI) plunged to 207, the lowest
level since June 2012's economic soft spot. However, the sharp drop was largely the result of seasonal adjustments and calendar shifts. Broadly speaking, the path of the CCI suggests modest, but steady economic growth in the United States.
Some factors that drove the plunge in the CCI are likely to be reversed in coming weeks.
The CCI was negatively impacted by seasonal factors and calendar shifts with shipping traffic
dropping sharply and having the biggest impact. However, initial jobless claims, the VIX, and retail sales also deteriorated.
The opinions voiced in this material are for general information only and are not intended to
provide or be construed as providing specific investment advice or recommendations for any
individual. To determine which investments may be appropriate for you, consult your financial
advisor prior to investing. All performance referenced is historical and is no guarantee of future
results. All indices are unmanaged and cannot be invested into directly.
The fast price swings of commodities will result in significant volatility in an investor's holdings.International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
This research material has been prepared by LPL Financial.
To the extent you are receiving investment advice from a separately registered independent
investment advisor, please note that LPL Financial is not an affiliate of and makes no
representation with respect to such entity.
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
The financial consultants of Wealth Management are registered representatives with and Securities are offered through LPL Financial. Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates.
Not FDIC/NCUA Insured Not Bank/Credit Union
Guaranteed May Lose Value
Not Insured by any Federal Government Agency Not a Bank Deposit
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