Chris’ note: Yesterday, the Fed raised rates for the tenth time since March 2022. As top market timer Phil Anderson has been showing his readers, it’s another sign that his bullish forecast is playing out.
Phil has called every major market move over his 30-year career. And he’s done it by studying recurring market cycles that most people don’t know exist.
In today’s insight, he reveals why we’re headed into one of the most lucrative stages of the bull market that began in 2009. And why now is the time to up your exposure to stocks in anticipation of that rally.
The Fed has done it again…
Yesterday, it raised its target interest rate by a quarter of a percentage point.
And it hinted that it could have been the last one in the rate hike cycle it started in March of last year.
The market now believes the Fed is done raising interest rates. In fact, it anticipates an interest rate cut by the end of this year.
I’m not a sentiment trader. I don’t read the tea leaves of market psychology.
I put my faith in something more reliable – the 18.6-year Real Estate Cycle.
It’s the length of time it takes for the real estate market to go through one boom-bust cycle.
And because real estate is so essential to the economy… this cycle affects the boom-bust phases of the stock market, too.
It’s what’s allowed me call every major market turn over the past three decades.
This is the real “beat” of the market.
And since I discovered it, I’ve used it to help my subscribers get ahead of the investing crowd.
For instance, for more than a decade, I warned that the stock market would peak around December 2019.
A month later, the blue-chip S&P 500 hit an all-time high and then skidded 25% lower to its bottom in October 2022.
And in July 2003, I wrote…
The peak [of the Real Estate Cycle is] still a way to go yet – three to four years would be my best guess at this stage, but we will let the indicators tell the story.
Three years later, in 2006, the U.S. housing market peaked. Four years later, in 2007, we got the subprime mortgage crisis. And the S&P 500 peaked.
When you look into the chasm between the market’s expectations and 18.6-year cycle, you discover opportunities the crowd misses.
So, what does the market expect now?
Be a Buyer, Not a Seller
Fed boss Jerome Powell was careful in his remarks – as always.
He didn’t want to show his cards and signal to the market outright that there would be no more hikes.
He pushed back against investor expectations that the Fed would cut rates by the end of the year. He doesn’t want the markets to be too complacent.
These mind games are part and parcel of how the Fed communicates its intentions to investors. Managing expectations is part policy and part psychology. Powell knows that well.
Most investors still see a recession ahead. But as I’ve been showing readers of my new advisory, The Signal, this is a time to be a buyer, not a seller, of stocks.
There are plenty of opportunities in the market right now. In fact, we’re up on three out of four stocks in the model portfolio at The Signal since I recommended them on April 11. One of those – a homebuilder – is up 10%.
(If you want to learn more about how to use my 18.6-year cycle to forecast market turns, go here.)
Also, energy prices fell yesterday. This could be another opportunity. The market clearly thinks global demand for energy will go down because of the “upcoming recession.”
Well, I don’t think so.
Interest rates will go down by the end of the year. Lower rates will produce a rally in most assets – including stocks and real estate.
This will be the final… and one of the most lucrative stages… of the current boom cycle.
Narrative Shift
And now, I’m seeing one of the most fascinating phenomena in market punditry.
It’s more breathtaking than the Northern Lights… and more elusive than a snow leopard…
A narrative shift.
We have gone from doom and gloom to “things may not be as bad as we thought.”
This is one of the latest pieces of commentary along these lines from influential British newspaper the Financial Times…
As always, the mainstream media is slow to grasp what’s really going on in the economy.
I won’t blame it. It’s never been good at reading the markets or making clear and correct predictions.
But it’s slowly coming around… The article that accompanied the headline above lists reasons why investors should be optimistic about the economy.
For one, none of the world’s largest economies – China, the U.S., the European Union, India, Japan, Britain, and South Korea – are in a recession. And these are responsible for 70% of the world economy.
Meantime, supply chain issues are improving.
And China has reopened its economy after its COVID-19 lockdowns. It’s one of the world’s largest consumers of pretty much everything from raw materials to luxury goods.
It’s true – the global economy is doing fine. But it’s more important to understand what happens next. So, I’m making another prediction…
2021 All Over Again
As the financial media makes a 180-degree turn on the recession narrative, investors will start to see that the world is in better shape than they thought.
The happier narrative will trickle down to government offices, boardrooms, and trading floors.
Then the media will amplify and spread this new narrative.
Then we’ll get even happier news… more “up” days in the market… more wild speculation. It will be like late 2021 all over again.
Then everything will crash when the 18.6-year cycle ends. But that won’t be until mid-decade.
Until then, I see a lot of buying opportunities from the housing market to stocks.
Regards,
Phil Anderson
Editor, The Signal
P.S. As I said, we’re currently at the most bullish point in the 18.6-year cycle… A point I call the Eleventh Hour. And you could set yourself up right now for a chance at life-changing wealth.
But it’s important you know where to look as this point in the cycle plays out…
The last time I saw an Eleventh Hour moment was 20 years ago. Back then I went nine for nine on the trades I recommended with an average peak gain of 485%.
I recently did an exclusive interview with Daily Cut editor Chris Lowe. And I revealed my insights on the 18.6-year cycle…
I also shared how you can access a special report with my top three plays for this Eleventh Hour.
Go here to access it.