Why the Experts are WRONG About a Recession
I see a lot of strength in the economy right now…
And that’s BAD news for the market.
Let me explain why — and tell you what to do about it.
For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.
Why the Experts are WRONG About a Recession
So-called “experts” like Goldman Sachs are saying a recession is coming.
Once it arrives, they believe the Fed will stop raising interest rates…
And then the stock market will finally be able to rally.
But they’re WRONG.
Here’s why I’m so sure, and here are your three options for action…
A Historically Strong Economy
The U.S. economy is strong right now. The data proves it.
You see, America is a consumer-driven economy: If consumers are spending, the economy will be strong.
Where do consumers get their spending money? From their jobs. And right now, the U.S. labor market is on fire. In fact, its strength is at historic levels.
For example, the number of jobless claims right now is 1.3 million. The last time we saw a figure that low was about 50 years ago — 1969 — during the Vietnam War.
And keep in mind: that’s 1.3 million out of a total U.S. workforce of 150 million people. And the workforce has basically doubled since Vietnam.
Bottom line: a huge percentage of Americans are working and earning. And when these workers earn, they spend. That’s not a recession!
But don’t just take my word for it…
The Urge to Splurge
Look what some top companies said in recent earnings releases:
Craig Vosburg, Chief Product Officer with Mastercard (NYSE: MA):
“We’re seeing pretty healthy trends with consumers… a lot of demand… the consumer appetite to spend is strong.”
Bob Nelson, SVP of Finance with Costco (Nasdaq: COST), reported:
“We’re seeing a little bit of shift where people are spending their money. Last year, there was more stuff for the home… and this year, it’s more sales in tickets and restaurants and travel.”
In other words, people are out and about. Instead of sitting on the couch and buying stuff online, they’re spending on experiences.
And here’s another telling sign…
A Look at Vice
The Wall Street Journal recently looked at the health of the “Vice” sector. (As you may know, vice spending is one of my top indicators for identifying economic trends.)
It spoke with someone who produces content for OnlyFans, a website for adult-oriented interactions. This worker said business is slow. This suggests fewer people are sitting in front of their computers in search of “entertainment.” Instead, they’re going out!
Data from Adult Friend Finder, one of the largest online dating sites, supports this shift:
As you can see, traffic is up, up, up.
And that means people are going out — and spending.
The Economy Keeps Getting Stronger
So now you know: the U.S. economy is strong.
In addition, now that China is lifting Covid lockdowns, demand for U.S. products will keep rising. And easing supply-chain challenges will boost demand even further.
If the economy remains strong, the Fed will keep raising interest rates.
And, unfortunately, if rates keep going up, the stock market will keep crashing.
So, what can you do?
Your Three Options
You’ve got a few main investment options:
- You can move everything into cash.
- You can hold tight and do nothing.
- OR, you can do some trading — where you sell into strength and buy into weakness.
Want to give yourself a shot at some trading profits? Check out the trading idea I’m giving my “Pro” subscribers.
In the meantime, Zatlin out. Talk to you soon.
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