In it still looks like a policy driven market event, we highlighted the various credit metrics we follow that suggest the recent approximately 20% drop in the S&P 500 Index was a market event rather than an credit led economic event.  The most recent release of the Chicago Fed National Financial Subindices reinforces that view.  This is a weekly data series, and despite fear the market swoon was suggesting a coming recession, it has not shown up in the 105 banking/shadow banking/financial market indicators measured by the Chicago Fed as of 12/21/2018.  As our note below highlights, there has certainly been some weakening in credit, but it has been coincidental with the equity market weakness vs. leading it.

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