Tag Archives: The Mann

INFLATION UPDATE

MAY 16, 2024 – The March report came in at 3.4%, at low end of my forecast of 3.4%-3.6% and below the consensus estimate of 3.5%. The 3-month annualized inflation rate is 6.7%. The 6-month annualized inflation rate is 3.8%. These figures are above the annualized rate (3.4%) and thus indicate the annual CPI should remain in this area or higher for awhile. The data is predicting a reading between 3.4% and 3.6% next month. I think this reasonable.
The Fed’s December statement that they expect to lower interest rates 3 times in 2024 looks to be inaccurate. The market is expecting one reduction – maybe in September or December.
It appears to me that although the Fed states their CPI target is 2% they are actually keeping it in 3.0-3.5% range on purpose.
Shalom,
The Mann

PS For those who read to the end, a tidbit of amazing information. By the Year 2100, the largest Age Group in the European Union will be 85 years and older. It won’t even be close. The second largest Age Group (55-59yo) will be about 60% the size. If you wonder why the world is going to robotics (Amazon has more robots than human employees now), it is because we simply won’t have enough human workers. The working age population worldwide is projected to decline beginning around 2050.

BULLISH ON WHEAT

MAY 15, 2024 – I haven’t been paying attention to my March 22nd forecast for a Bull Market in Wheat. On that date the December 2024 futures was about $6 after bottoming a few weeks earlier at $5.65. The futures closed today at $7.11 after peaking at $7.29 a few days ago. If I were trading the futures, I would be ecstatic and would probably grab some profit.
But, just forecasting here and the forecast was for a significant increase in price over the next 12 months….now 10 months.
I expect Wheat prices to increase significantly over the next 12 months. I will revisit this at yearend to see how things turn out.
As an aside, no need to rush out and store up on bread:)
Shalom,
The Mann

STOCK MARKET AND INTEREST RATES

MAY 15, 2024 – It has only been ten days since I posted an update about stocks and bonds. But, when things change, you need to note it. It looks like the recent correction ended in my target range and the final leg of this Bull Market is underway. We are dealing with TARGET 1 from my January 8th post which stated the following:
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
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In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction was a short 5 weeks (ended April 17th) and bottomed in the 37,000 to 38,500 range at precisely 37,612.
As noted in the January 8th forecast above, the final target range is in the 43,000 to 45,500 range. It is crazy to be precise (albeit the past 5 months have been spot on), but I really am liking 44,000 to 44,300 for a final top. As this final leg plays out, a more precise target can be made.
Remember, a Bull Market climbs a wall of worries. And for 18+ months it has fed on the world predicting a recession. Regardless of where we go from here, ALL of those economists and pundits have been 100% wrong. The case is closed on them.
INTEREST RATES – As noted ten days ago, it appears the bond decline ended on April 25th. Bonds have rallied strongly since then. Albeit, the first wave of the 5-wave move has probably ended and a small decline should start immediately. A much larger rally lies ahead – which means interest rates will resume their decline at that time.
I will post updates as the stock and bond rallies unfold.
Shalom,
The Mann
P.S. If I told you that sometime in the 2030’s we may have +100% annual GDP growth, what would you say?

STOCK MARKET AND INTEREST RATES

MAY 5, 2024 – It’s been awhile since I posted about stocks and bonds. It takes time for the waves to play out. Back on January 8th I posted the following:
There are two target options so I will simply label them 1 and 2. They are both bullish so I am not saying the market may go up, but it may go down:) Just saying that there are a few ways it can play out statistically. So here goes the impossible….
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
TARGET 2 – The current rally peaks out around 41,906. This is followed by a decline to the 38,392-39,734 range. Then a final rally to the 44,256-47,819 range with possible targets within the range being 44,256 and 45,598.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
===================================
In late March, the DOW peaked at about 40,300. Since then, a data correction has been made and the top is listed at just under 40,000. I haven’t seen that happen before. Regardless, the top was close enough to the Target 1 projection of 40,522. The subsequent correction has been underway for 5 weeks and we are right in the 37,000 to 38,500 range.
As I have noted in the past, as the waves unfold I can update the targets. I would say the low end of the range needs to be lowered to 36,000. I do not think the low for this correction is in place, yet.
INTEREST RATES – There is a good chance the bond decline finally ended on April 25th. This was a 4-month decline. From here bonds should rally at least through the Summer and interest rates should decline at least 100bp.
I will post a stock update when I believe this correction has ended.
Shalom,
The Mann

INFLATION UPDATE

APRIL 11, 2024 – The March report came in at 3.5%, above my forecast of 3.0%-3.2% and the consensus estimate of 3.4%. No doubt about it, this was a strong inflation reading.
The 3-month annualized inflation rate is 7.4%. The 6-month annualized inflation rate is 4.0%. These figures are significantly above the annualized rate (3.5%) and thus indicate the annual CPI should remain in this area or higher for awhile.
The data is predicting a reading between 3.2% and 3.6% next month. I think the reading will be between 3.4% and 3.6%.
The Fed’s December statement that they expect to lower interest rates 3 times in 2024 looks to be inaccurate. The market is expecting one reduction – maybe in June. As I always say, we shall see.

Shalom,

The Mann

TO REITERATE – MORTGAGE RATES ARE NOT AN ISSUE

MARCH 22, 2024 – The following is from an article by Gabriella Cruz-Martinez of Yahoo Finance on March 21st:
“Sales of previously occupied US homes gained momentum in February as buyers accepted the new normal of higher mortgage rates.
Existing home sales surged 9.5% in February from the month before to an annualized rate of 4.38 million, the National Association of Realtors (NAR) reported Thursday. That was almost 6% higher than a year earlier and marked the largest monthly increase in a year.
Sales picked up last month, even as mortgage rates flirted with 7%.”
My June 15, 2023 post titled “CAN PEOPLE AFFORD 7% MORTGAGE RATES?” appears to have been accurate and played out as I predicted. I will simply show a few quotes here. You can revisit the post if you want to read it in its entirety.
A side note, the S&P HomeBuilders Index is at all-time highs. It is up almost 75% since the October low. Even with the supply of new homes soaring, the market has no worries of a housing bust occurring this year.
Shalom,
The Mann
Excerpts from my June 15, 2023 post:
JUNE 15, 2023 – YES! The simple answer is, of course!
I saw a survey this week where people said they needed mortgage rates to drop to about 4% for them to afford a new house. As my friend The Red-Shoe Economist, KC Conway, would say ‘I call BBQ-Sauce!’
People can afford a 7% mortgage rate. They can afford a 10% mortgage rate! Us old-timers remember when a rate below 10% was a bargain.
By this time next year when the world realizes the day of artificially low interest rates is history and will not return, they will simply adjust to living with 7%-8%+ mortgage rates and supply and demand analyses will work the same as they did before. People adjust. They always have. It’s just easier to complain before facing reality and adjusting the way they do things. Human nature.

R.I.P. (MIS)LEADING ECONOMIC INDICATOR

FEBRUARY 21, 2024 – On Tuesday, The Conference Board said its Leading Economic Indicator (LEI) is no longer signaling recession. The indicator has been calling for a recession for 23-straight months. The record is 24 months back in The Great Recession.
I brought this to your attention last September. This is one of many indicators that have been wrong about a recession.
I have mentioned a few times why this was going to occur. I am going to write a detailed post explaining the situation one of these days. It will take some work, so I will need to wait a bit before sitting down to do such.
I have adopted the copyrighted term Rotating Reversion to the Mean (RRM) for what has occurred over the past 18 months. I look forward to introducing it to you soon.
In the interim, you can bury the LEI for now. It will be right again one day. It just had no chance this time around.
Shalom,
The Mann

INFLATION AND ECONOMY UPDATES

FEBRUARY 12, 2024 – The January report came in at 3.1%, just below my forecast of 3.2%-3.3%. and above the consensus estimate of 2.9%.
The 3-month annualized inflation rate is 1.0%. The 6-month annualized inflation rate is 1.8%. These figures are lower than the annualized rate (3.1%) and thus indicate the annual CPI should drift lower.
The data is predicting a reading between 2.6% and 2.7% next month. Like last month, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.0%-3.1% for next month’s figure.
ECONOMY – We have had 6 straight quarters of above 2% GDP growth since the recession in the first half of 2022 ended. The last two quarters have been above 3% (!) and some forecasts expect another 3%+ figure for the First Quarter of 2024. With annual population growth around 0.7%, any GDP growth above that amount is exceptional. The chance of a recession occurring this year remains slim to nil. It certainly won’t occur in the first half of this year.
STOCKS – The Dow 30 continues its march towards 40,000. I never did see anyone else predict 40,000 this year. I suspect there are a few others like me out there somewhere. As they saay, never count your chickens before they hatch. 38k+ is not 40k. But, the stock market is saying the economy this Summer should be extremely strong.
The recession mongers couldn’t have been more wrong for the past 20 months. They will continue to be wrong into the foreseeable future.
Shalom,
The Mann

INFLATION UPDATE

JANUARY 12, 2024 – The December report came in at 3.4%, below my forecast of 3.6%. and above the consensus estimate of 3.2%. Annual inflation of 3.4% was well below the double-digits many people were predicting at the beginning of the year and about double what I had forecast it would be.
The 3-month annualized inflation rate is -1.4%. The 6-month annualized inflation rate is 1.1%. These figures are lower than the annualized rate (3.4%) and thus indicate the annual CPI should drift lower.
The data is predicting a reading between 2.4% and 2.7% next month. However, I think this will be way off. Inflation is historically high in January and February. I am going to forecast 3.2%-3.3% for next month’s figure.
Shalom,
The Mann

DOW 2024 FORECAST

JANUARY 8, 2024 – Precisely forecasting the stock market is obviously futile. That said, I am posting this forecast so I can keep track of it and how it plays out. There are two target options so I will simply label them 1 and 2. They are both bullish so I am not saying the market may go up, but it may go down:) Just saying that there are a few ways it can play out statistically. So here goes the impossible….
TARGET 1 – The current rally peaks out around 40,522. This is followed by a decline to the 37,008-38,350 range. Then a final rally to the 42,872-45,640 range with possible targets within the range being 44,214 and 44,298.
TARGET 2 – The current rally peaks out around 41,906. This is followed by a decline to the 38,392-39,734 range. Then a final rally to the 44,256-47,819 range with possible targets within the range being 44,256 and 45,598.
Obviously, it would be best to round the numbers and use general ranges. Based on the above, I would say the current rally should take us above 40,000 and up to 42,000 at the high end. A small decline should end in the 37,000 to 39,000 range. And the last big move in this Bull Market should end between 43,000 and 47,000.
Please let me know if you have seen anyone forecast the Dow going to these levels this year. There is a chance the top may not occur til early 2025. I am not interested in timing re the above forecasts. Only prices.
What would make me have to totally reconsider everything? A Dow close below 34,590 would likely erase any chances of the above occurring. So, as a gambler, you are looking at a bet with a potential upside of 5,000-9,000 points and downside of about 3,000 points. A decent bet to take.
I got lucky back in early 2018 when I forecast the Dow would have a small correction, followed by a move to new highs, followed by a larger correction below the last low, then back to even a higher new high, followed by the largest correction to lows below 22,000 – this occurred in the lockdown in 2020 with a low around 18,000 which at the time I forecast within 100 points. One of my better longer-term forecasts ever.

Right now, I am 15+ months into this Bull Market forecast and I suspect it has at least 6 more months to play out if not 9-15 more months. Or I will be wrong this time around:)
As I usually say, we shall see.
Shalom,
The Mann