Tag Archives: economists

Mann Overboard

ECONOMY UPDATE

JULY 26, 2024 – Just to be transparent, I cashed in most of my holdings today. When the Dow is up 700 points it is a good day to sell:) We continue to see the Dow perform way better than the NASDAQ. My expectation of one more new high move by the Dow not being confirmed by the NASDAQ looks better and better.

JULY 25, 2024 – 2nd Quarter GDP came out above expectations at +2.8%. We have now completed 2 full years of strong economic growth. Something that 99% of the economists and pundits said would not occur.
I do some of my best thinking in my dreams. I have long thought of them as an alternate reality and am amazed at some of the things they come up with. As I dreamed about the economy, an analogy came to mind. A traffic stoplight.
For the past 2 years, the economy has been on solid Green. Economists and pundits kept calling for Yellow or full Red. We never had a chance of such and never came close.
However, for the first time in over 2 years, I am switching my signal from solid Green to that hard to see split second when Green starts to turn to Yellow. As I have mentioned many times, the stock market (Dow 30 for my analysis) is forecasting the economy 6 months into the future. Right now, that is the end of February 2025. Basically, next Spring.
The NASDAQ 100 has a good chance of having topped on July 10th. Thus, it would be in the first stages of a Bear Market. My analysis is calling for the Dow to make one more move to new highs peaking as low as 42,000. 43,000 still remains possible. The NASDAQ 100 would also rally. But, not to new highs. If the Dow does put in a final top over the next month, then it would be saying the economy will peak by the 1st Quarter of 2025 and start a downturn after that. I forget how long ago it was that I mentioned a long lead time indicator was suggesting a recession in 2025. Also, the first year of a Presidential cycle often sees a recession.
In summary, it looks like the economy’s Green light is just starting to change to Yellow. Using another analogy, the stock market appears to be the first car on a rollercoaster that has passed the top and started downward.
I will say that my 50+ years of experience says that stock market tops are tough to call as they stretch out over a period of time. Stock market bottoms are usually easy to see as they take a ‘V-formation.’ Interestingly, commodities do just the opposite.
Lastly, ALL sentiment indicators say almost all stock markets (NASDAQ, S&P 500, Dow, Russell, etc) are around a top.
We shall see how the next month or so plays out. There is a small chance the Dow has already topped, too. I will be watching closely.
Shalom,
The Mann

Mann Overboard

YES, BofA, WE ACCEPT YOUR APOLOGY

AUGUST 2, 2023 – As I predicted at the beginning of the year, by this Summer the broken record recession mongers would start throwing in the towel and admit there will be no recession this year. The first of many apologies comes from BofA.
Shalom,
The Mann
January 13, 2023 – Bank of America CEO Brian Moynihan said Friday the bank is preparing for a potential recession this year, including the possibility of a sharper downturn where unemployment climbs rapidly.
“Our baseline scenario contemplates a mild recession,” he said during a call with investors. “But we also add to that a downside scenario, and what this results in is 95% of our reserve methodology is weighted toward a recessionary environment in 2023.”
In the case of a more severe recession, Moynihan said the second-largest U.S. bank anticipates the jobless rate will climb to 5.5% in 2023 and remain at 5% or higher through 2024.
August 2, 2023 – (Bloomberg) — Economists at Bank of America Corp. scrapped their forecast for a recession in the US, becoming the first large Wall Street bank to officially reverse its call amid growing optimism about the economic outlook.
“Recent incoming data has made us reassess our prior view that a mild recession in 2024 is the most likely outcome for the US economy,” BofA economists, led by Michael Gapen, wrote in a note to clients on Wednesday.
“Growth in economic activity over the past three quarters has averaged 2.3%, the unemployment rate has remained near all-time lows, and wage and price pressures are moving in the right direction, albeit gradually,” they wrote.