How To Invest Around The Business Cycle

The Macro Institute's Weekly Economic Primer

Author

The Macro Institute
March 09, 2026

(If you’re enjoying the videos, we would really appreciate it if you could take a second to “Like” it on YouTube. It helps our content reach more and more people! Thank you!)

Don’t have time to watch the whole video? Here’s 5 Key Takeaways:

🔹 What Even Is The Business Cycle?: The business cycle is the natural rise and fall of economic growth over time. This can be measured a variety of ways, but we prefer using the ISM Manufacturing Index or the ISM New Orders Index.

🔹 Textbook Business Cycle Follows 1-2-3-4 Pattern: The theoretical business cycle most investors learn about follows a simple pattern. You start at the expansion phase, then move to the peak, then to a recession, before finally entering the trough.

🔹 It’s Actually Much More Complicated: In reality, the business cycle does not follow this simple pattern and is filled with mid-cycle slowdowns and reaccelerations. This makes finding true inflection points in the business cycle difficult for investors.

🔹 Stock Market Returns Vary Across Phases: S&P 500 returns have historically varied greatly in the different phases of the business cycle. This makes locating we are in the business cycle extremely important for investors.

🔹 Sector Selection Across The Cycle Is Key: One of the main ways investors can position themselves is by rotating into different sectors as the business cycle progresses. Sectors typically perform quite differently from one phase to the next.

Miss our last few videos? No worries. Here are some of the most popular 👇

🚨 Act Fast… You Could Save $100!🚨

Want to learn the exact Macro Investing framework that Francois Trahan has used over his 30+ year career on Wall Street?

Well, we have good news.

We condensed his framework into an online 15-hour Macro Investing Bootcamp, and over the next few weeks you could save big.

Over the next few Macro Monday’s we will be releasing a limited number of discount codes. They will be available on a first come first serve basis!

One Person Can Save $100 by using code “Bootcamp_100” at checkout.

Two People Can Save $50 by using code “Bootcamp_50” at checkout.

Five People Can Save $25 by using code “Bootcamp_25” at checkout.

Macro Data Center

The Macro Week Ahead

📆 Last Week’s Data Key Takeaways

🔹 Mixed Messages From National PMIs: The ISM Manufacturing Index held at 52.4 (vs 51.8 forecast), but prices paid exploded to 70.5, the highest since June 2022. S&P Global Manufacturing fell to 51.6, a seven-month low. The ISM Services Index surged to 56.1 (vs 53.5 forecast), the highest since July 2022. S&P Global Services told the opposite story at 51.7, a ten-month low.

🔹 February Payrolls Data Shocked: Non-farm payrolls fell -92,000 in February (vs +59K forecast), a shocking miss. However, a healthcare strike did account for ~28K of the loss. December payroll numbers were also revised lower to -17K from +48K. The unemployment rate ticked higher to 4.4%.

🔹 Notes From The Fed’s Beige Book: Seven of 12 districts reported growth, down from eight previously. Manufacturing improved, with eight districts growing which was up from five previously. This was largely fueled by data center and energy demand. Also, tariff costs have been increasingly passed to customers, and employment was described as "no hire, no fire."

🔹 Retail Sales Dipped On Selective Spending: Retail sales fell -0.2% in January (vs -0.3% forecast), the first decline since October. Winter storms hit gas stations (-2.9%), apparel (-1.7%), and auto dealers (-0.9%). Online retail was the bright spot at +1.9%. Year-over-year, total sales were still up +3.2%.

🔹 Import & Export Prices Were Also Mixed: Import prices rose +0.2% in January, as nonfuel imports drove the gain at +0.5%, while petroleum imports fell -2.7%. Nonfuel import prices were up +1.2% Y/Y, and haven't declined on a 12-month basis since February 2024. Export prices jumped +0.6%, led by a 13.2% surge in air passenger fares, the largest monthly rise since November 2020.

Macro Job Board

Analyst will engage in detailed, technical discussions with traders and researchers by providing macro updates and quantitative analyses, presenting their logic and reasoning grounded in data, numbers, probabilities, and statistical insights, and addressing any follow-up questions with clarity and precision.

Working closely with the chief LatAm economist, the analyst will: analyze and interpret high-frequency economic data releases, develop and maintain databases, forecasting models, and proprietary economic indicators, and build quantitative tools to forecast economic growth, inflation, and interest rates.

This role will work closely with the Senior Portfolio Manager to develop systematic macro strategies, focusing on alpha research, including idea generation, statistical analysis, back testing, and implementation. Must independently explore and develop new ideas while collaborating in a team-oriented environment.

What We Read This Weekend