Macro Brief · 26 October 2026
Sentiment drops into Fear as the consumer leg hits a new low
Regime when published
Growth
late cycle
Market
neutral
Inflation
stable
6m recession
0.4%
Pinned reference state, dated to the data as known at publication. Past briefs are not revised when new data arrives. See current regime →
The sentiment index fell to a composite of 30.2 from 51.3 and is inside its Fear band for the first time since 14 September.
Its consumer leg moved for the first time in a month, to a score of 4.2 from 12.5, on a Michigan reading of 48.1 against the 51.7 it had been carrying.
The market model gave back last week's bull reading and holds neutral at 58.1% confidence, with 41.9% left on a bull branch that read 79.2% seven days ago.
Growth was unmoved again, still late cycle at 72.1% confidence, with the outright expansion branch at 22.9% against 23.3%, and the six-month recession probability eased to 0.35% from 0.40%.
Inflation reads stable at 50.8% confidence with a 48.4% weight on an inflation-shock regime, and those figures are identical to last week's to every decimal place, which means the model has not produced a new reading rather than having produced a matching one.
Forward look
The fall came from the fast legs and it was not gradual. Safe-haven demand scores 8.0 against 62.8 a week ago, market volatility 12.8 against 29.3 and equity momentum 13.2 against 20.6, while credit appetite stayed high, at 86.7 against 92.7. So the index is in Fear on three of its four market legs with the fourth unmoved, and the two economy legs published beside it and never blended into it are split: the curve slope reads 46.4 while the consumer leg sits near the floor of its trailing window. The separate month-end market-regime measure still reads caution, at 65.4 from its 30 September close, and the financial-conditions model is unchanged at 96.5% neutral. Historically, a sentiment reading this low alongside credit this calm has been a divergence that resolved rather than persisted, and the next consumer and inflation releases are the readings that would resolve this one. These are historical model readings, not investment advice.
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The brief is generated from quantitative regime models. Historical analysis, not financial advice. Not a recommendation to buy or sell any security.