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Dividend Swaps Signal No Slowdown as European Crisis Boils

Investors don’t see a U.S. recession in the next 12 months, based on dividend swaps that indicate consumption of services may grow 1.8 percent by November 2012.

The annualized forecast as of yesterday held in the 11-month range of 1.8 percent to 2.2 percent, according to the four authors of a National Bureau of Economic Research report. They derived the estimates using “standard forecasting techniques” to calculate equity yields from dividend-swaps contracts, said Jules van Binsbergen, a faculty research fellow at the NBER and one of the authors.