Terrible Earnings Reports from Target & Walmart indicate that an Economic Crash is Imminent. Sell Everything Now while you still can.
Target & Walmart are two bellwethers of the US Economy and Stock Market. And they just reported awful Earnings. Profits crashed while inventory stockpiles surged. This indicates that the American Consumer is cutting back on spending and that the US Economy is heading towards Recession.
This Recession will likely pop the simultaneous Asset Bubbles that are raging across the Stock Market, Crypto Market, and Housing Market. Which is why I believe it is a good time to sell Assets and stockpile cash.
The Housing Market is also facing a slowdown. The National Association of Homebuilders just reported a 29% drop in homebuyer traffic of newly constructed homes. Just as Homebuilders across America are building a record amount of new homes (over 1.6 Million). Just like Walmart & Target – Homebuilders overacted to increased demand during the pandemic and are now building up too much inventory.
The combination of a likely Recession and declining physical good prices is exacerbated by the Monetary Tightening done by the Federal Reserve and Jerome Powell. Interest Rates are going up while Money Printing is now over. That likely means more economic pain ahead.
Will the Government step in to stop the Market Crash? While it’s difficult to predict, I suspect the answer is no. Because the current high inflation environment mixed with record low unemployment rates means that the Federal Reserve is mandated to pursue Price Stability. Which means that it’s likely that Interest Rates will rise until inflation comes down and unemployment goes up.
NAHB Builder Sentiment:
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Originally published at https://www.youtube.com/watch?v=nyWRFthFq04