Policy Uncertainties & Market Performance

This chart provides a comprehensive view of policy uncertainties and their correlation with the U.S. stock market, represented by the Wilshire 5000 Total Market Full Cap Index.

  1. Economic Policy Uncertainty Index (Trade Policy): This index captures the level of uncertainty surrounding trade policy. This includes factors such as tariffs, trade wars, or other potential disruptions to international commerce.

  2. Economic Policy Uncertainty Index (Sovereign Debt & Currency Crises): This reflects the level of uncertainty pertaining to sovereign debt issues and potential currency crises.

  3. Economic Policy Uncertainty Index (Government Spending): This index measures uncertainty related to government spending and fiscal policy.

  4. Economic Policy Uncertainty Index (Health Care): This represents the level of uncertainty in health care policy, potentially influenced by factors such as changes in health care legislation or pandemics.

  5. Economic Policy Uncertainty Index (Financial Regulation): This gauges the level of uncertainty in the financial regulatory environment.

Overlaying these indices with the Wilshire 5000 Total Market Full Cap Index, the chart provides valuable insights into how different policy uncertainties might impact the overall market sentiment and performance.

Potential Interpretations:

Positive Scenario: If the indices of policy uncertainty are stable or declining, and the Wilshire 5000 Index is trending upwards, it suggests that the market is responding well to the current policy environment and that the level of policy uncertainty is not deterring investors.

Negative Scenario: If the policy uncertainty indices are rising significantly and the Wilshire 5000 Index is falling, this could signal that increased uncertainty around economic policies is causing investor anxiety and negatively affecting market performance.

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