{"id":1092943,"date":"2019-01-03T18:16:19","date_gmt":"2019-01-03T18:16:19","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=106510"},"modified":"2019-01-03T18:16:19","modified_gmt":"2019-01-03T18:16:19","slug":"where-the-stock-market-will-end-2019","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1092943","title":{"rendered":"Where the Stock Market Will End 2019"},"content":{"rendered":"

This post Where the Stock Market Will End 2019<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Yesterday we ventured a cowardly 2019 forecast, in humble recognition of our erring psychic vision.<\/p>\n

Markets would rise, we soothsaid \u2014 or fall \u2014 or end the year precisely where they began.<\/p>\n

We likewise predicted the economy would advance, retreat or jog in place.<\/p>\n

Some readers denounced our abject cowardice.<\/p>\n

Take your stand upon one hill or the other, they thundered. But take your stand:<\/p>\n

\u201cMake a call,\u201d demanded one reader, Michael by name. \u201cWe are counting on you to make actual predictions…\u201d<\/p>\n

\u201cPlease do not waste my time with something that says nothing,\u201d argued another reader, Richard.<\/p>\n

A third \u2014 Gary \u2014 believes our dish of applesauce actually diminished his cognitive powers:<\/p>\n

\u201cI think I lost IQ points in reading the article\u2026 So you know nothing\u2026. Why publish it?\u201d<\/p>\n

Our character thus slandered, today we summon our best blood \u2014 \u201cnot the blood of our finger but the blood of our heart\u201d…<\/p>\n

And come out flat-footed with a 2019 forecast guaranteed to keel you over.<\/p>\n

First we train our sights on a far more immediate vista \u2014 today\u2019s market activity.<\/strong><\/h2>\n

But perhaps it is best we not\u2026<\/p>\n

The Dow Jones hemorrhaged another 660 crimson points today.<\/p>\n

The S&P lost another 62. The Nasdaq shed 202 dreadful points \u2014 a 3% trouncing.<\/p>\n

What accounted for today\u2019s thunder and lightning?<\/p>\n

A falling Apple, primarily.<\/p>\n

Apple slashed its quarterly revenue forecast late yesterday \u2014 for the first time in over 15 years.<\/p>\n

CEO Tim Cook cited an “unforeseen” slowdown in the Chinese economy.<\/p>\n

And so a bellwether of global economic conditions presents a distressing omen. Explains Greg McKenna, markets strategist at McKenna Macro:<\/p>\n

\n

That Tim Cook and his company mentioned China as the reason behind the downturn in the company\u2019s outlook seemed to hit exactly the pressure point traders and investors were already alarmed over.\u00a0<\/em><\/p>\n<\/blockquote>\n

Apple stock plunged 10% today\u2026 incidentally.<\/p>\n

But it was not Apple alone that frightened the horses today\u2026<\/p>\n

The Institute for Supply Management reports that U.S. manufacturing has plunged to a 15-month low.<\/p>\n

Manufacturing sentiment also suffered its largest one-month drop since October 2008 \u2014 when the financial crisis was in full blast.<\/p>\n

On that note…<\/p>\n

We are reliably informed that global liquidity is evaporating at its fastest clip since 2007\u201308.<\/strong><\/h2>\n

According to analyst Michael Howell of the CrossBorder Capital blog, global liquidity has slipped some 25% below its long-term trend.<\/p>\n

The Federal Reserve is driving the business.<\/p>\n

It is tightening financial conditions far more than generally realized… once we account for quantitative tightening.<\/p>\n

Howell estimates the \u201ctrue\u201d fed funds rate is not the official 2.5% \u2014 but closer to 5%.<\/p>\n

\u201cIn other words,\u201d says he, \u201ctight liquidity conditions are equivalent to the Fed undertaking around 20 rate hikes rather than the nine it has so far implemented this cycle.\u201d<\/p>\n

Thus the ground is laid for another 1997 Asian crisis \u2014 though not limited to Asia:<\/p>\n

\n

Unlike the 2007<\/em>\u201308 crisis, which was more about a broken banking system involving the sudden collapse of leverage among overextended banks and shadow banks, the current credit squeeze looks more like the 1997<\/em>\u201398 Asian crisis when central banks, led by the U.S. Fed, tightened the supply of primary liquidity… This time around, financial markets are probably even more interconnected and more global. Consequently, this could be an Asian crisis-like sell-off, but one not only confined to Asia.<\/em><\/p>\n<\/blockquote>\n

Perhaps someone should alert Jerome Powell?<\/p>\n

But to return to our thumping market prediction\u2026<\/p>\n

We have suggested previously that the Federal Reserve\u2019s most recent rate hike may have taken the fed funds rate over the \u201cneutral rate.\u201d<\/p>\n

That is, interest rates are no longer \u201caccommodative.\u201d<\/p>\n

Nor are they merely neutral.<\/p>\n

They begin to drag and tug.<\/p>\n

History suggests recession or market crisis is on tap six\u201312 months after rates cross the neutral line.<\/strong><\/h2>\n

Furthermore\u2026<\/p>\n

The stock market generally turns in its worst performance six months preceding a recession.<\/p>\n

Well, it has pointed south since early October \u2014 for precisely three months, that is.<\/p>\n

At present speed and heading, the economy is on course for recession by April perhaps.<\/p>\n

Unless, that is, the stock market finds a fair wind beforehand.<\/p>\n

We have further furnished evidence<\/a><\/strong> that the \u201ctrue\u201d money supply is falling violently (see linked article for details).<\/p>\n

\"Chart\"<\/p>\n

Let the record show:<\/p>\n

Recession or credit crisis followed previous occasions when the true money supply decelerated at the present clip:<\/p>\n

\"Chart\"<\/p>\n

The chart suggests trouble starting in March.<\/p>\n

In conclusion\u2026 we have strong circumstantial evidence pointing to recession sometime this year.<\/p>\n

March 1 \u2014 incidentally \u2014 is when Trump\u2019s hard trade deadline with China lapses.<\/p>\n

If no accord is reached by March 1, the trade war resumes at full pitch.<\/p>\n

Mixing it all together, let us proceed to our rafter-shaking 2019 forecast:<\/strong><\/h2>\n

Trump realizes the extent to which his presidency hinges upon a thriving economy and stock market.<\/p>\n

He will therefore settle upon a deal and declare resounding victory.<\/p>\n

The stock market will rally hard on the news.<\/p>\n

But it will be short-lived.<\/p>\n

Political uncertainty will play the devil with markets…<\/p>\n

The Mueller investigation will soon come out.<\/p>\n

We hazard it will reveal no evidence whatsoever of Russian collusion.<\/p>\n

But give a man nearly two years and millions of dollars to find skeletons in closets\u2026 and he will find skeletons in closets.<\/p>\n

Especially, we may add, if he ransacks the closets of a horse trader like Donald John Trump.<\/p>\n

Once the Democrat-controlled House impeaches Trump \u2014 yes, that is correct \u2014 exhausted markets will lose remaining steam.<\/p>\n

This will drag on much of the summer.<\/p>\n

Trump will survive \u2014 the Senate will not convict him of charges \u2014 but the process will leave him severely diminished.<\/p>\n

Meantime, markets will confront the reality of drying liquidity\u2026 and economic growth will slow to a glacier\u2019s pace.<\/p>\n

The economy will finally be in recession by December.<\/p>\n

The stock market will likewise end 2019 sunk in a bear market…<\/p>\n

The Dow Jones will end the year at roughly 18,000.<\/p>\n

The S&P will hold above 2,000 \u2014 but barely.<\/p>\n

The Nasdaq will take a good 40% lacing from today\u2019s levels.<\/p>\n

Gold will challenge $1,500.<\/p>\n

There is your preview of 2019, down to the last jot and tittle, down to the last decimal point \u2014 and you can just take it to the bank.<\/p>\n

Never you mind our last prediction. Or the prediction prior. Or…<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/em><\/p>\n

The post Where the Stock Market Will End 2019<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Where the Stock Market Will End 2019<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Readers denounce us violently for our 2019 market forecast… “Tight liquidity conditions are equivalent to the Fed undertaking around 20 rate hikes rather than the nine it has so far implemented this cycle”… The precise level where the stock market will end the year…<\/p>\n

The post Where the Stock Market Will End 2019<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[921,484,366,853,463],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1092943"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1092943"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1092943\/revisions"}],"predecessor-version":[{"id":1092944,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1092943\/revisions\/1092944"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1092943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1092943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1092943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}