ECONOMIC UPDATE: Don't Pop the Champaign Yet
All eyes on The Street are concentrated on economic fundamentals, while the players understand little or next to nothing about the geopolitical trends shaping the future.
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What a difference a month makes.
The U.S. equity market continues its November spike.
And today, on the news that the nation’s core Consumer Price Index (CPI) hit its lowest 12-month reading since September 2021—increasing 4.0 percent year over year—equities continued their bounce with the belief that, with inflation easing, the Feds will begin cutting interest rates. Thus, the further rates fall, the more cheap money to fuel economic growth, market speculation, IPOs, and mergers and acquisitions.
However, while the CPI is flat, it is just 0.1 percent lower than what The Street had predicted and inflation and core inflation are still at 4 percent. Yet, with this being seen as a positive, these lower-than-expected numbers further support our forecast that the Feds and major central banks will lower interest rates in 2024.
However, while the equity market profile is glowing, the signs of serious economic danger ahead are being ignored by the equity market gamblers.
The Office Building Bust that will bring down the banking system is key among the distress indicators ahead that are essentially ignored by the equity market gamblers. In the U.S., according to Kastle Systems, the office occupancy rate is at 50.5 percent in the 10 major cities. In San Francisco the rate is just 41.9 percent, Philadelphia and San Jose are at 42.5 percent and Los Angeles at 48.2 percent.
Minus a wild card event, such as Ukraine launching a strike on a nuclear plant, Israel and the U.S. going to war against Lebanon, Iran and Syria, a major false flag event, etc., we forecast that as the major cities go down as a result of the Office Building Bust, the work-at-home trend, rising crime, homeless, refugees etc., more people will be leaving big cities and moving to urban and ex-urban cities, towns and villages.
Making a bad situation worse, the fewer commuters, more of the businesses that depended on them will be going out of business. In Manhattan, for example, foot traffic is down 33 percent from pre-COVID War 2019 numbers. Nightlife ends early and homeless and migrants fill the streets while fear and anguish keep spreading.
The facts are in the numbers. Today—confirming our trend forecast that this would occur following the draconian lockdown mandates that destroyed the lives and livelihoods of billions across the globe, The Wall Street Journal reported their outlook for the dire commercial real estate sector:
The Clearest Sign Yet That Commercial Real Estate Is in Trouble
Lenders are issuing a record number of foreclosure notices related to risky property loans
Remember when politicians launched the COVID War back in 2020, and there was fear of economic destruction? The word from the government, the media and repeated by the plantation workers of Slavelandia was, “It’ll come back.”
Socially, economically, spiritually, physically, etc., by the numbers, as we have continually reported, it has not “come back.” For example, barely reported is the downturn in tourism that is a big money maker for hotels and the service sector. According to the U.S. Travel Association, overseas arrivals to the U.S. are down 16 percent from pre-COVID War 2019 levels and hotel demand remained flat in September for the fifth consecutive month.
TREND FORECAST: FactSet reported that The Street has lowered their S&P 500 earnings projections for the fourth quarter by 3.9 percent which is more than double 10-year average of 1.8 percent. That marks the deepest reduction during the first month of a quarter in more than three years.
Yet, with expectations that the Fed will, as we had forecast, lower interest rates in 2024, and according to FactSet with the S&P 500 trading at 18.4 times projected earnings—down from 19.8 in July and 21.6 in 2021—the upside in the equity markets remains strong.
And, we maintain our forecast that major central banks will lower interest rates which will further juice equities. However, what is not being reported is that the low interest rates will also push inflation higher.
As we note as trend forecasters: “Opportunity misses those who view the world through the eyes of their profession.”
All eyes on The Street are concentrated on economic fundamentals, while the players understand little or next to nothing about the geopolitical trends shaping the future. Instead, they repeat what the mainstream media reports and have little true knowledge of where we are, how we got here, and where we are going as WWIII continues to escalate.
The Israel War has dramatically changed the economic future. Should it continue to escalate, we forecast that Brent Crude will spike to $130 per barrel which will, in turn, crash the equity markets and global economies.
And not reported by the mainstream media is the already dire situation affecting nations across the globe. To see how bad it is and where it’s going, just take a look at the refugee crisis sweeping across Europe and North America.
Millions keep doing all they can to escape from nations where the majority of people lack basic living standards while government corruption, crime and violence escalate.
Therefore, we maintain our forecast that while interest rates will drop and equities may continue to rise, there is no connection between Wall Street and Main Street. Again, the lower interest rates fall, the deeper the dollar will decline, thus it will cost consumers more to buy less.
And, the lower interest rates fall, the higher gold prices will rise. Indeed, with America suffering from a $33.5 trillion debt burden, last Friday Moody’s rating agency downgraded the nation’s economic outlook to “negative” from “stable.”
TREND FORECAST: Minus a wild card event, such as Ukraine launching a strike on a nuclear plant, Israel and the U.S. going to war against Lebanon, Iran and Syria, a major false flag event, etc., we forecast that as the major cities go down as a result of the Office Building Bust, the work-at-home trend, rising crime, homeless, refugees etc., more people will be leaving big cities and moving to urban and ex-urban cities, towns and villages. The most attractive will be those that are historic, old fashion, with light traffic and near bus terminals and Amtrak.
Thank you ... Appreciate the insights as always!
Also love your YouTube channel!
Peace and Freedom 🙏🏻💜💪🏻
This major rally was indeed unexpected, in that it's been so violent.
I guess it makes sense that there would be one final pump, one last gasp of hope, before the economy truly sinks.
Would love to hear your thoughts, as soon as you've been able to re-think the situation, of where/when this current stage of a belief in a soft landing will peter out.
Peace, love and freedom indeed.
Best regards,
Rafael