Stock Market Crash
Indicators.

Market capitalisation / annual GDP × 100

The Buffett Indicator compares the market value of listed domestic companies with the economy’s annual gross domestic product. A ratio of 150.0% means that the measured equity market is worth one and a half times one year of domestic output. The US uses the World Bank’s annual ratio. The euro-area variant divides the ECB’s monthly listed-share market value by four consecutive quarters of nominal GDP from Eurostat via the ECB.

A high ratio can reflect demanding valuations, but also a large listed sector, higher expected profitability or lower discount rates. Multinational companies earn revenue abroad, while GDP measures production within an economy. Private companies are absent from the numerator. Differences in listing practices and industry mix make a universal US–European warning threshold inappropriate.

The euro-area numerator covers shares issued by resident companies, including financial firms, at market value. Both inputs use changing euro-area composition and euro units. The latest available completed GDP quarter is shown explicitly; monthly market values and quarterly output update on different schedules. This derived variant is not identical to the US annual measure.

Real price / ten-year mean of real earnings

CAPE divides an equity index’s inflation-adjusted price by its average inflation-adjusted earnings over ten years. Averaging reduces the influence of a single strong or weak year. A high ratio means paying more for historical real earnings; a low ratio means paying less.

The measure helps compare long-term valuations, but cannot date a market reversal. Accounting, industry composition, recession losses, buybacks and changing profitability affect interpretation. US and European markets need their own historical context.

The US series uses the ordinary CAPE column in Robert Shiller’s freely accessible workbook. Its latest monthly snapshot can contain estimated CPI or an incomplete month; source notes and provisional status are retained. A European equivalent exists: Barclays calculates MSCI-based European CAPE, reported in Robeco’s research. The card identifies an older published reference, not a current quote. Its report publication date is distinguished from an unspecified exact valuation date. One reference cannot supply a five-year trend, so no European history is invented.

Unemployed / labour force × 100

The unemployment rate measures the share of the labour force that is unemployed under the relevant survey definition. The labour force includes employed people and unemployed people actively seeking and available for work; it is not the entire population. Seasonal adjustment attempts to remove recurring calendar patterns so consecutive months are easier to compare.

The United States figure is the BLS civilian unemployment rate for people aged 16 and over, retrieved through FRED as UNRATE and checked against the official BLS release. The euro-area figure, supplied by Eurostat through the ECB, covers ages 15–74. Age ranges and survey practices limit direct regional comparisons.

A sustained rise may indicate weaker demand and can put household spending and corporate earnings under pressure. But unemployment often reacts after activity has already weakened. A low headline rate can also coexist with falling participation or fewer hours worked. Month-to-month movements are noisy and can be revised. The five-year chart now uses the longer FRED history. A missing source month, including October 2025, is left as a gap. Observation months and retrieval dates are shown separately.

(Price index / index 12 months earlier − 1) × 100

Inflation measures changes in consumer prices. The US series uses BLS’s all-items CPI-U for urban consumers, without seasonal adjustment, retrieved as FRED CPIAUCNS. We divide each index observation by the same month one year earlier, subtract one and multiply by 100. The euro-area series uses Eurostat’s all-items HICP annual rate via the ECB.

The baskets differ, including housing treatment, coverage and weights. Annual rates reflect base effects. Lower positive inflation means prices rise more slowly; deflation means the price level falls. High inflation may reduce purchasing power and prompt tighter policy, while falling inflation can reflect improved supply or weaker demand.

More than six years of US index history supports the complete five-year annual-rate chart. Missing source months are left blank, and the latest rate is checked against BLS’s release. European data use the HICP flow introduced in 2026, rather than the discontinued ICP series. Read inflation alongside employment and policy.

Fed target-range midpoint · ECB deposit facility

This dashboard defines the US policy rate as the midpoint of the Federal Open Market Committee’s target range for the federal funds rate. The lower and upper bounds are displayed alongside it. The midpoint is calculated here from the target-range fields in the New York Fed’s reference-rate API; it is not the effective federal funds rate actually traded in the market.

For the euro area, the displayed setting is the ECB deposit facility rate. Its observation date is the effective date of a policy change, so an older date can still describe the current setting. Rate changes occur at policy decisions, not automatically every week.

Higher policy rates tend to restrain borrowing and spending and increase the discount rate applied to future cash flows. Lower rates can support financing and demand. The impact varies with inflation expectations, debt structures and credit conditions, and arrives with uncertain lags. A rate cut may signal easing financial conditions or a response to serious economic weakness; it is not unambiguously bullish.

Ten-year government yield − three-month yield

The yield-curve spread subtracts a three-month government yield from a ten-year yield measured on the same observation date. It is expressed in percentage points: 4.0% minus 5.0% equals −1.0 percentage point. A negative spread is called an inversion. No unmatched dates or missing maturities are combined.

The US series uses Treasury par yields. The euro-area series uses the ECB’s modelled, continuously compounded spot yields for AAA-rated euro-area government issuers. Par yields and spot yields are different concepts, and the European AAA sample is not the entire euro-area bond market. The regional comparison is therefore informative, not perfectly like-for-like.

An inversion can reflect restrictive short-term policy and expectations of future rate cuts or weaker activity. Historically it has often preceded US recessions, but timing and reliability vary. Term premia, asset purchases and demand for safe assets can also shape the curve. It does not predict a precise crash date or guarantee an equity-market decline.

ECB composite index · scale 0 to 1

The Composite Indicator of Systemic Stress summarises stress across several parts of the financial system rather than looking at a single share index. The ECB’s methodology combines market-based stress measures for financial intermediaries, money markets, equities, bonds and foreign exchange. It accounts for correlations: simultaneous stress across markets is more systemic than an isolated disturbance.

The dashboard uses the daily New CISS variant for both the United States and the euro area. Values are expressed on a scale from zero to one. A higher reading indicates more measured financial stress relative to the indicator’s historical calibration. It is not a probability of recession, bank failure or a stock-market crash.

The original weekly CISS and the daily New CISS are not spliced together. Market-based indicators can react rapidly once conditions deteriorate, but may miss vulnerabilities building during apparently calm periods. Revisions and methodological changes also matter. Read this measure alongside valuations, employment and financing conditions, not as a stand-alone alarm.

No dashboard can reliably answer when the next stock market crash will occur. Valuation, recession and financial-stress indicators describe different risks, with different delays. This website does not publish a crash probability, trading signal or personalised investment recommendation.

Stretched valuations, tightening financing conditions, deteriorating employment and rising financial stress can reveal vulnerabilities. None is a sufficient warning on its own, and expensive markets can remain expensive for years.

The Buffett Indicator and Shiller CAPE offer valuation context against their own histories. Interest rates, earnings, market composition and geographical coverage affect interpretation. High valuations do not establish a crash date.

Recession indicators such as employment trends and the yield curve can help frame the question, but they cannot provide certainty. The dashboard compares US and euro-area observations and does not estimate a recession probability.

There is no reliable method here for predicting the timing or magnitude of a stock market crash. Compare multiple indicators, inspect their observation dates and limitations, and distinguish long-term vulnerability from short-term market stress.

Housing losses interacted with mortgage securitisation, high leverage, fragile short-term funding and interconnected financial institutions. The historical-crashes section explains the sequence and links to primary and academic sources.