LPL Financial announced today that it has launched a new index that allows financial advisors to gauge how current market and economic conditions compare to various bull, bear and base scenarios its research group outlined at the start of the year.

The Boston-based firm says its Crisis Conditions Index offers up-to-the-week snapshots of how the economy stands based on ten economic indicators: unemployment, banking system strength, financial liquidity, retail sales, global trade activity, housing demand, manufacturing demand, and corporate credit, consumer and stock market confidence.

Jeffrey Kleintop, LPL's chief market strategist who developed the index, notes advisors and their clients are grappling with information overload caused by all the economic and earnings data, policy actions and other market events and statistics that inundate the airwaves. The CCI reduces thousands of indicators to a simple set of ten gauges that provide the best means of tracking on a weekly basis whether the economy is recovering, flat-lining or distressed, he says.

"Importantly, while conditions remain far from normal, our initial CCI results indicate that there is cause for cautious optimism," Kleintop says.  "Among other key telltale signals, narrowing Baa-rated bond spreads reflect improving corporate credit market conditions, while retail sales are starting to rebound and economically sensitive commodity prices have moved higher.  At the same time, there has been robust growth in the real money supply, indicating that the Federal Reserve's actions to provide adequate liquidity for U.S. economic activity are gaining traction.  Obviously, there are reasons to remain concerned, but the CCI's current readings clearly rule out the worst-case scenarios that continue to abound among many market watchers."