October 2015 - Forecasts & Trends

Forecasts & Trends is much more than just investment blog posts. You need to know the "big picture;" you need to have a "world view," especially in the post-911 world; and you need more information than ever before to be successful in meeting your financial goals. Gary intends to help you do just that.

Forecasts & Trends

Blog Subscription Form

  • Email Notifications
    Go

Archives

  • China & Fed Lift-Off Dominate Market Trends - Why?

    Is it just me, or does it seem like the global markets are preoccupied with two things: China’s economy and when the Federal Reserve will raise US interest rates? Sure, there are other things going on, but these two topics seem to be driving the financial markets more than any others this year.

    In that light, we will begin today with a look at China’s latest economic report last week which received mixed reviews among economists. While China’s economy is slowing, growth is still officially near a 7% annual rate. Even if it’s only 5-6%, as many believe, a recession is not likely in China anytime soon.

    Following that discussion, I will touch briefly on the Fed’s policy meeting that began today and ends tomorrow. Most Fed-watchers, including me, don’t expect any surprises tomorrow, but you never know. On the subject of the Fed, there is increasing talk about short-term interest rates going below zero. I’ll briefly explain what that’s all about.

    While China and the Fed seem to dominate the headlines and financial market trends, there is a very important report coming out this Thursday. That’s when we get the government’s first estimate of 3Q GDP. The pre-report consensus is at 1.7% with some estimates as low as only 1.0%. If correct, that means the strong growth in the 2Q (3.9%) did not carry over during the summer.

    Finally, I will close out today’s letter by summarizing the most interesting article I read last week.

    ...
  • Upcoming Debt Ceiling Fight Could Get Really Ugly

    Today we will focus initially on the upcoming battle over whether to increase the US debt ceiling. The government reached the current statutory debt limit of $18.1 trillion back in March. Since then, the Treasury has been paying the nation's bills by using so-called "extraordinary measures." But the Treasury warned recently that such funding will be exhausted by November 5, and that means another debt ceiling battle will play out between now and then.

    While we've seen this movie before and know how it will ultimately end, the political battle in the coming weeks could get really ugly, especially now that House Speaker John Boehner has announced that he is stepping down soon. With a lack of leadership in the House, this year's debt limit circus could be especially unsettling for the stock and bond markets.

    Next, we turn to the question of whether a recession is likely just ahead. While the economy grew by a better than expected 3.9% in the 2Q, more and more forecasters are downgrading their outlook for the second half of this year. The number expecting a recession in the months ahead rose sharply in a survey by Bloomberg at the beginning of this month. The good news is that about 85% of economists surveyed do not expect a recession to begin this year.

    As usual these days, there's a lot to think about - so let's get started.

    ...
  • September Jobs & Manufacturing Reports Disappoint Again

    As is becoming increasingly frequent, we will touch on several bases today, given that there’s so much going on these days. (Speaking of bases, How ‘bout them Texas Rangers!!) Hitting several topics in a single E-Letter makes it more interesting and fast-paced for me, and I hope the same is true for you. After all, YOU are what this is all about. That’s why I always value your input, positive or negative, so much.

    Today, we’ll start with the latest economic reports. I wish I could tell you they were encouraging – most were not. There was last Friday’s disappointing unemployment report for September – which was below expectations for the second month in a row. Then there was last Thursday’s decidedly downbeat report on US manufacturing, which was yet another big disappointment.

    These two negative reports have most Fed-watchers very confident now that there will not be a rate hike this year. Most now believe that “lift-off” won’t happen until early 2016. Yet the Fed may fear it will lose its credibility if it doesn’t make at least one move this year. So expect this debate to continue at least until December 17 when we will know for sure.

    Last Wednesday, the head of the International Monetary Fund warned that there are new reasons to be concerned about the global economy, and emerging economies in particular. IMF Managing Director Christine Lagarde issued the latest warning, along with another call for the US Fed to delay the first rate hike until next year. But does the Fed care what she thinks? Probably not.

    Finally, I have just completed a new SPECIAL REPORT: Seven Risk Factors That Could Drive the Markets Lower. Back in March and April, I saw the storm clouds gathering on the horizon and warned my readers to reduce their long-only (buy-and-hold) positions in stocks and equity funds.

    Still, most investors don’t understand why this six year-old bull market seems to have run off the tracks. In this new Special Report, I discuss in detail the unique combination of risk factors that are weighing on the markets today and may continue to do so.

    Best of all, I offer advice on what you can do to protect yourself should the latest market downturn continue. If you are looking for some clarity in this crazy market and some advice on how to protect your portfolio, be sure to download my latest FREE SPECIAL REPORT at the end of today’s E-Letter.

    ...