Why Big-Name Investors Are Calling Me for Advice

Big-name investors are trying to figure out when the Federal Reserve will slash interest rates.

That's because if they can get in before it happens, they can potentially capture double-digit profits.

The thing is, these investors have been calling me lately...

Because I know when it's going to happen – and today, I'll share the details with you.

Why Big-Name Investors Are Calling Me for Advice

I see an opportunity for us to earn returns as high as 20%.

It centers around when the Fed will cut interest rates – and knowing when to get in before it happens.

Having a reputation as "Mr. Labor," I know there are two factors that are going to trigger this rate cut:

1. Jobless claims
2. Payrolls

Both categories appear to be super strong right now, but they have a history of weakening quickly. And that's when the pain reaches the point to where the Fed takes action.

As I mentioned, institutional investors have been reaching out, asking when this shift is going to happen. That's because they know the economy is weakening. Let me show you what I mean...

A Dismal Earnings Season

For starters, they're looking at the recent dismal earnings season. In the fourth quarter of 2022, corporate earnings among S&P 500 companies fell 5% year over year, and revenues were essentially flat.

But that's backward-facing data. Institutional investors are also looking forward. And some of the data they're seeing shows a legitimate economic pullback.

For example, they're looking at import data. Imports offer a glimpse into future sales – what level of cars, televisions, furniture, and clothes are coming into the country with plans to be sold to consumers down the road?

Here's a 13-year snapshot of import data at the port of Long Beach, the largest seaport on the West Coast:

Notice the deep, prolonged contraction on the right-hand side. There is significantly less stuff coming into the U.S. And that's at the heart of a weakening economy.

Not Even Close

Furthermore, this weak import data inevitability spills over into America's labor force. In fact, it already has.

Over the past few months, companies have been conducting massive layoffs, and not just in big tech, either. Along with layoffs at Apple (AAPL), Alphabet (GOOGL), and Microsoft (MSFT), we've seen job cuts at Disney (DIS), Goldman Sachs (GS), and 3M (MMM).

In total we've seen around 200,000 layoffs. Are we done?

Sadly, both institutional investors and I don't think so. Let me explain...

Let History Be Our Guide

The prediction of more layoffs to come stems from recent history.

In 1990, about 2% of payrolls were reduced. During the dot-com crash of 2001, 3% were lost. (Losses for the Great Recession and Covid recession were significantly larger.)

But what if 1990, the last "soft" recession, is our basis here? If we were to cut around 2% of our workforce, that would equal two million people. And if current layoffs are only at 200,000, we've got a ways to go.

And make no mistake: It's certainly plausible that another 1.8 million people lose their jobs.

Consider the construction industry, for example. This industry is building at the same pace as in 2019 but has 200,000 more workers. They could all be let go in an instant. And keep in mind that if a major industry like construction lays people off, the ripple effect can be very strong.

Additionally, all it would take for more layoffs is a simple pullback in either consumer or business spending. And what did the recent import data just reveal? That's right, a pullback in inventory – i.e., items for consumers to spend money on.

A Silver Lining

I know all this talk of layoffs and recessions is discouraging. But there is a silver lining...

When these events happen – causing the Fed to slash interest rates – I'm going to know ahead of time. And as such, you're going to know, too.

I have the forward visibility to alert you to these market events and enable you to get positioned to cash in on them.

While we wait, "Pro" subscribers can take advantage of an investment opportunity offering steady returns in this rocky market.

We're in it to win it. Zatlin out.

MONEYBALL PRO
TRADE OF THE DAY

[ ACTION TO TAKE ]

FOR MONEYBALL PRO READERS ONLY
>>>>>>>>>> Learn more <<<<<<<<<<

In it to win it,

Moneyball Economics