The following is a summary of our recent Big Picture podcast, “The Meltup Before the Meltdown,” which can be accessed on our site here or on iTunes here.
We’re likely near the end of this business cycle, says Financial Sense’s Jim Puplava, and normally when we come to the end, all seems well: the economy is booming, stocks are hitting records, and people are making money.
For example, think back to the stock market in 1999 and the first 3 months of 2000. The Nasdaq went vertical in a classic, melt-up euphoria as everyone piled into the sector driving the “New Economy”.
As we move closer to the top of this market, we’re more likely to see euphoria, he added. Right now, mutual funds and stocks are going up by double digits. Unemployment is low, consumer confidence is high, retail sales are up, and the economy is booming. All of these indicators normally occur around the end of the cycle, and we know what eventually triggers that end: a Fed rate raising cycle, which we are now in.
Good Times May Trigger the Shift
We’re seeing PMIs appear to be very strong, especially the ISM Manufacturing and Non Manufacturing Indexes, Puplava noted. In September, the ISM Manufacturing hit its highest level in 13 years.
“Despite the weather we had with those hurricanes toward the end of August and September, we could see a GDP print eventually at 3 percent for Q3,” he said. “The economic numbers have been picking up.”
….also from Financial Sense:
Great Expectations – Stock Market Breaks 2017 Pattern in Strong Pre-Earnings Rally
