Oh, how things have changed…
Just recently, everybody and their uncle predicted a recession.
The question wasn’t whether it would happen. Talking heads on financial TV discussed how soon it would take place and how gory the economic consequences would be.
(Meanwhile, I have said for months that we aren’t going to see one.)
And now I’m observing one of the most fascinating things in the financial commentary space.
It’s more breathtaking than the northern lights… more elusive than a snow leopard…
We have gone from gloom and doom to “things may not be as bad as we thought.”
This is one of the latest pieces of commentary along these lines:
As always, mainstream media is somewhat slow to understand what is really going on in the economy.
I won’t blame it. It hasn’t been too good at either reading the markets or making clear and correct predictions.
But it’s slowly coming around… The article whose headline I used above lists some of the reasons why investors should be optimistic about the economy.
For one, none of the world’s largest economies (including China, the U.S., the European Union, India, Japan, the UK, and South Korea) are in a recession. And these are responsible for 70% of the world’s economy.
Global supply chains are improving, as I said back in January.
China’s reopening after years-long COVID-19 lockdowns is another reason to be optimistic about the global economy. The country is one of the world’s largest consumers of pretty much everything, from raw materials to luxury items.
It’s true – the global economy is doing fine.
But it’s more important to understand what happens next…
So here I am, making another prediction.
What’s Next? The Cycle Will Continue
As the financial media makes a 180-degree turn on the recession narrative, investors will start slowly digesting the fact that the world may be in better shape than they thought.
The new “happy” narrative will trickle down to government offices, boardrooms, and trading floors.
Then it will be further amplified by the media, which will now be confident that it got the narrative right this time.
More happy news…
More “up” days in the market…
Investors taking more risk, making ever crazier bets…
It will be like late 2021 again…
And then everything will crash when the current 18.6-year cycle ends. But that won’t be for years yet.
Until then, we’ll see a lot of buying opportunities, from the housing market to stocks.
Stay calm and trust the cycle.
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson
P.S. I’m sure the whiplashing narrative from the media has taken a toll on you and your finances.
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