Is Wall Street bracing for the worst year since 2008? Watch my interview on Fox Business Network’s Risk & Reward to hear my thoughts on the state of the markets and hedge fund performance. 

Once again, it’s time for our monthly update on risk factors that have proven to be good indicators of economic trouble ahead.

We have actually seen some moves worth watching since last month, with signs of slowing, although the overall take remains positive.

Although last week started reasonably strong, it ended with a severe disappointment. This Monday update takes a closer look at the economic data.

In yesterday’s post, I reviewed the market data—including valuations, changes in margin debt, and changes in the market cap as a percentage of GDP—for some potential signals of a market crash. All seemed to provide valuable insight but were certainly not definitive. Part of the problem is that these signals can give false alarms or give correct signals that nonetheless result in only minor downturns. So, another set of filters is needed to help refine the analysis.

In my latest Market Thoughts video, I discuss recent declines in U.S. and international markets, spurred by a slowdown in growth and declining consumer confidence. I also provide an update on U.S. economic performance, highlighting an increase in consumer spending.

In a continuation of my post from yesterday, I am not aware of any single indicator that can tell us when a market crash will occur. (I wish I were!) So, what I have done is reviewed previous significant market downturns and determined some common contributory factors that make sense in theory, as well as empirically.

I gave a talk last night to a group of clients, part of which included a discussion of the possible reasons behind recent market turbulence. Afterwards, a client asked me what else, beyond what I had discussed, could have caused the downturn? I thought that was an interesting way to look at how we as investors should watch markets.

Yesterday was another rocky day for U.S. markets, with substantial declines across all major indices. It brought us close to the lows of late August, and the question now is, will we go lower this time?

Last week’s data was mixed, but on the whole it wasn’t too bad. Let’s take a closer look at the economic news.

The Fed seems to realize that the message markets took from last week’s decision not to raise rates was not, in fact, the one it wanted to send. Since that decision was announced, we have seen statements from several committee members making the case that it was a “close call” and that a rate increase is still in the cards this year—probably in an attempt to mitigate the markets’ worries. What has been missing, though, is some indication of what the most important member, the chair, thinks about the whole thing. Now we know.