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.
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
Foreclosures are surging in an opaque and risky corner of commercial real-estate finance, offering one of the starkest signs yet that turmoil in the property market is worsening.
Lenders this year have issued a record number of foreclosure notices for high-risk property loans, according to a Wall Street Journal analysis. Many of these loans are similar to second mortgages and commonly known as mezzanine loans.
Mezzanine loans have high interest rates and offer a faster and easier path to foreclose than mortgages. The Journal analysis found notices for 62 mezzanine loans and other high-risk loans this year through October. That is more than double the number for all of last year, and likely the highest total ever for a single year, as higher interest rates and rising vacancies punish the property sector.
Again, confirming our trend forecast for Office Building Bust, WSJ goes on to note that “Many recent foreclosures are office buildings.”
Yet, this is buried in the article and the damage the Office Building Bust will have on the banking system and inner city businesses that depend on commuters who no longer commute is essentially out of the news.
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.
LAST WEEK: ANOTHER WINNING WEEK
Last week, stocks continued the previous week’s momentum with all three major indexes advancing,
The Dow Jones Industrial Average edged up 0.56 percent for the week, the NASDAQ jumped another 2.1 percent, and the Standard & Poor’s 500 index added 1.17 percent.
All 11 sectors in the S&P rose, with infotech stocks proving strongest. Chip makers gained after Taiwan Semiconductor reported strong October sales.
Markets turned upbeat on Friday after slumping Thursday, when U.S. Federal Reserve chair Jerome Powell told a conference that it is too soon to say that interest rate hikes are over. Bond yields rose Thursday, pushing down stock prices.
“Markets will continue to be very choppy until we get better clarity of what the [Fed’s] next policy action is,” Amanda Agati, chief investment officer at PNC Asset Management, told The Wall Street Journal.
Interest-rate futures traders have been wagering that the Fed will begin cutting interest rates early in 2024. Last week, odds shifted: speculators increased their bets that rates will hold steady through the first half of next year.
Bond yields throttled back on Friday, ticking down to 4.627 percent after closing Thursday at 4.629 percent. That returned more money to stocks.
Investors also seemed to ignore the newest University of Michigan survey of consumer sentiment, which showed continued gloom among Americans and expectations that inflation will rise again.
Gold’s continuous contract moved down 3.7 percent on the week to $1,942.70 at 5 p.m. U.S. EST on 10 November.
Brent crude oil’s price slid 4.3 percent to $81.70 at 5 p.m. U.S. EST on 10 November. West Texas Intermediate fell through the $80 floor to end the week down 4.8 percent at $77.17. China’s economic malaise and the lackluster global economy seemed to replace fears among traders of a wider Mideast war, some analysts said.
Bitcoin continued its climb, rising 6.2 percent to $37,364.70 at 5 p.m. U.S. EST on 10 November. It has gained almost 40 percent since 12 October.
Abroad, stocks were mixed for the week.
The London FTSE was off 0.77 percent. The trans-European Stoxx 600 lost 0.33 percent.
The Japanese Nikkei 225 crept up 0.36 percent. South Korea’s export-centered KOSPI index rose 0.41 percent.
The Hang Seng index in Hong Kong dove 3.97 percent. Mainland China’s CSI Composite slipped less than 0.1 percent, while the SSE Composite dipped 0.27 percent.
DOW UP AS INVESTORS ANTICIPATE CPI DATA
The Dow Jones Industrial Average gained 54.77 points, or 0.16 percent, to close at 34,337.87 and the benchmark S&P 500 shed 3.69, or 0.08 percent, to 4,411.55. The tech-heavy Nasdaq was down 30.36, or 0.22 percent, to 13,767.74.
Investors on The Street will monitor Tuesday’s October Consumer Price Index report, which will be used by the Federal Reserve when considering any future rate hike before the end of the year in its effort to bring down inflation.
The report is expected to show the headline CPI up 3.3 percent over the prior year, which would be a decrease from the 3.7 percent rise seen in September. Yahoo Finance that a main driver has been a drop in energy prices.
Elsewhere, London’s FTSE was up 65.28, or 0.89 percent, to 7,425.83 and the Stoxx 600 was up 3.31, or 0.75 percent, to 446.62. The Nikkei, Kospi, and Hang Seng indexes were unchanged. China’s Shanghai Composite was up 7.56, or 0.25 percent, to 3,046.53. The Shenzhen Component also gained 0.25 percent.
TRENDPOST: The Street wants you to think that the Fed managed to stick a soft landing and will hold rates in place, but it is clear that if core inflation continues to hang around the 3 percent mark, it will move to raise interest rates further.
OIL: Brent crude rose $1.09, or 1.34 percent, to $82.52 a barrel while U.S. West Texas Intermediate contracts for December increased $1.09, or 1.41 percent, to $78.26 a barrel.
Oil benefited from new OPEC analysis that said it expects oil demand in 2023 to 2.46 million barrels a day, which would be an increase by last month’s estimate by 20,000 barrels, The Wall Street Journal reported.
The New York Times also noted that despite the ongoing war in the Middle East, fighting in Israel and Gaza, “no matter how vicious, has produced little disruption to petroleum supplies.”
Raad Alkadiri, managing director for energy and climate at Eurasia Group, a political risk firm, told the paper that the markets are “effectively dismissing that anything could go wrong.”
TRENDPOST: Oil prices remain our wildcard because so many things could go wrong in the Middle East and in Ukraine. We report in this week’s issue on how the U.S. has been striking targets in Syria where it has illegally invaded and is stealing their oil. In return, Syria is attacking U.S. troops with the alleged support of Iranian troops. Should this escalate as well as the increasing possibility of the U.S. and Israel attacking Iran, it will send Brent Crude above $130 per barrel which will in turn crash global economies and equity markets.
GOLD: Spot gold was up 0.47 percent to $1,945.899 an ounce and U.S. gold futures gained 0.6 percent to $1,950.20 an ounce.
Gold prices have been contained because there is a belief on The Street that the Israel War will not expand and there are lingering concerns by investors that the Fed is not done raising rates, which would make gold, a non-yielding asset—lose its luster.
The U.S. dollar slipped from 106.00 to 105.65, which makes a gold investment more attractive to foreign buyers, while the U.S. Treasury bond yields also slipped. FX Street reported that the 10-year yield stood at 4.63 percent.
TRENDPOST: While Israel ramps up its war and they kill more civilians in Gaza, and as Israel takes more initiative to strike targets in Lebanon, and Syria—and should the U.S. and Israel confront Iran militarily—a surge in gold prices will happen as investors seek a safe haven.
And although the Ukraine War is out what people call the “news”, with Kyiv losing—as we had forecast they would before the war began—we have also forecast they will launch some type of major attack against Russia that will get them back in the news. Therefore, as WWIII heats up on the eastern front, it will be of such a major proportion that it will have investors buying more gold.
BITCOIN: As of 5:22 p.m. ET, the world’s most popular crypto was trading down $566.42, or 1.53 percent, to $36,570.00.
Bitcoin struggled as investors anticipated the release of the CPI data, which prompted investors to shift millions worth of BTC into exchange-hosted wallets over the weekend, BeInCrypto.com reported.
Bitcoin is up 36.62 percent in the last month as investors anticipate the U.S. Securities and Exchange Commission’s decision on bitcoin ETF applications.
FXStreet reported that the SEC will make the decision on 17 November.
TRENDPOST: The report noted that JPMorgan analysts do not see a major jump in bitcoin prices if the ETFs are approved because there is a belief that “instead of new capital entering crypto, existing demand for Grayscale Bitcoin Trust and listed mining companies will move to newly approved spot ETFs and generate little to no interest from investors.”
TODAY: DOW POPS ON CPI NUMBERS
The Dow Jones Industrial Average jumped 489.83, or 1.43 percent, to 34,827.70, or 1.43 percent, to 34,827.70 and the S&P 500 was up 84.15, or 1.91 percent, to 4,495.70. The tech-heavy Nasdaq was up 326.64, or 2.37 percent, to 14,094.38.
The main news driver on the street was the U.S. Bureau of Labor Statistics’ CPI data that showed the core CPI, which does not include food and energy prices, increased 0.2 percent and 4 percent. Economists were anticipating 0.3 percent and 4.1 percent. The CPI hit a two-year low that gave way to optimism on The Street that the Fed will ease its monetary tightening.
Austan Goolsbee, the Chicago Fed president, called the report “slow but clear progress” on getting inflation back to healthy levels, CNBC reported.
In response to the data, the 10-year Treasury yield was down 19 basis points or about 4.44 percent, and the 30-year Treasury yield fell 12 basis points to 4.62 percent.
Elsewhere, the FTSE was up 14.64, or 0.20 percent, to 7,440.47 and the Stoxx 600 gained 5.98, or 1.34 percent, to 452.60. In Asia, Japan’s Nikkei was up 110.82, or 0.34 percent, to 32,695.93. South Korea’s Kospi was up 29.49, or 1.23 percent, to 2,433.25. Hong Kong’s Hang Seng was down 29.35, or 0.17 percent, to 17,396.86. The Shanghai Composite was up 9.54, or 0.31 percent, to 3,056.07 and the Shenzhen Component was up 16.73, or 0.17 percent, to 10,005.56.
TREND FORECAST: We maintain our trend forecast that we made nearly a year ago, that the Feds will keep lowering interest rates through 2024 in the run up to the November presidential elections to ramp up the economy to keep the team running the White House in power.
Indeed, for all to see who is in charge of America’s financial system, the current U.S. Treasury Secretary, Janet Yellen’s previous job was Fed-Head of the Federal Reserve Bankster syndicate.
OIL: Brent crude futures fell 5 cents a barrel to $82.47 a barrel and U.S. West Texas Intermediate was unchanged at $78.26 a barrel.
The CPI data raised expectations that the Fed could cut interest rates in the near future, which will bring down the value of the U.S. dollar – thus making oil a more appealing purchase on the international market.
TRENDPOST: The expectation in the oil markets is that the Israel War will not expand and the world will be spared a wider conflict that could hurt oil production in the region. Of course, that remains to be seen.
GOLD: Spot gold was up 0.9 percent to $1,962.44 per ounce by 2:30 p.m. ET, set for its best session since Oct. 27. U.S. gold futures settled 0.8 percent higher at $1,966.50.
Gold prices are up 8 percent on the year.
TRENDPOST: Gerald Celente has long said that high-interest rates are the only thing preventing a U.S. dollar collapse, and once the dollar falls, gold will soar because it becomes a better deal on the international market.
Gold continues to be the safe haven asset as major wars play out in the Middle East and Ukraine. It would not take much for investors to seek a safe haven for their investments if the Israeli war looks as though it is expanding.
Also, the lower interest rates fall, the deeper the dollar will fall and the higher gold prices and silver will rise.
BITCOIN: The world’s most popular crypto was trading down $901.10, or 2.47 percent, to $35,572.70.
All eyes in the crypto world are on how the U.S. Securities and Exchange Commission will rule on spot bitcoin ETF approval.
Cathie Wood, the head of Ark Capital, told CNBC that few people understand bitcoin more than Gary Gensler, the chair, who taught a class at MIT about cryptos. But she said his political ambitions could be at play in this case, according to CoinDesk.
Wood mentioned the “speculation” that Gensler dreams of becoming the Treasury Secretary.
“What does the Treasury Secretary do? It’s very focused on the dollar,” she said.
TREND FORECAST: We maintain our forecast that bitcoin is in a strong trading range and the prices should keep moving higher.