A rare market indicator has flashed a warning signal for stocks, appearing only five times since 2000.
The current market environment looks fragile compared with past drawdowns, according to macro research cited in the report.
Rising inflation is the central concern. It limits how much central banks can cut rates to support asset prices.
In previous selloffs, policymakers could ease monetary policy and push prices back up. That option is now constrained.
The research house advises investors to reduce exposure to stocks and shift toward bonds and cash.
The warning does not predict an immediate crash. It flags conditions that make the market more vulnerable to a sharp decline.
Investors should weigh the signal alongside other data. The indicator’s rarity makes it worth watching, but not a standalone trigger for action.
