The Real Reason Why The Market Hasn’t Crashed YET (Why I’m Still Investing)
Published: 2023-10-23
Status:
Available
|
Analyzed
Published: 2023-10-23
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
A recession is predicted to occur approximately 11 months after the Federal Reserve stops raising interest rates. Based on the last rate hike in July 2023 and the expectation of no further hikes, a recession is anticipated around June 2024.
"on average it has taken us roughly 11 months after the FED stopped raising the federal fund rate to go into an official recession... assuming that CME fed watch tool I just showed you is correct in predicting that they will not raise the rate on November 1st or ever again... That means we have to start counting from July this year 11 months from July this year takes us to June 2024"
Pending
If the Federal Reserve raises interest rates one last time in November, the recession would likely be delayed until October 2024.
"if that CME fed watch tool is wrong and they will raise the rate on November 1st that will probably be the last time so we'll count from November that takes us to October 2024"
Pending
Short sellers are anticipating that many companies will be unable to refinance their corporate debt as it matures, leading to difficulties in making monthly payments in the commercial real estate market.
"people that are shorting the commercial real estate market because they're anticipating that when that corporate debt matures and they'll have to refinance a lot of them won't be able to make those monthly payments anymore"
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The top seven companies ('Magnificent Seven') constitute nearly 30% of the S&P 500. Without these companies, the stock market index would be in negative territory.
"the top seven companies are disproportionately taking up a huge chunk of that like almost 30%... if you remove those seven out of the index the stock market would actually be down"
Pending
Historically, high concentration in the S&P 500 among a few companies has preceded significant market downturns (e.g., dot-com bubble with 50% loss, 2022 with 20% loss). The current concentration is slightly higher than in 2022.
"the more concentrated S&P 500 got among the few the worst things became... when that bubble popped stocks lost almost 50% of their value... when the market crashed it lost 20% of its value and our concentration right now is slightly higher"
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US consumer credit card debt has surpassed one trillion dollars, reaching its highest point ever.
"the US consumer credit card debt tops a trillion dollars so credit card debt is in fact the highest that it's ever been"
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Student loan payments are resuming in October, requiring an estimated 30 to 40 million Americans to pay an additional $300 per month.
"in October those things are coming back so think about 30 to 40 million people having to pay another $300 per month that starts this month"
Pending
The inverted yield curve indicates a 61% chance of a recession within the next 12 months and has accurately predicted 10 out of the last recessions since 1955.
"the yield curve says 61% chance of recessions coming next 12 months... whenever this has happened the yield curve has accurately predicted 10 of the last recessions dating all the way back to 1955"
Pending
Historically, recessions occur approximately 11 months after the Federal Reserve stops raising interest rates.
"on average it has taken us roughly 11 months after the FED stopped raising the federal fund rate to go into an official recession"
Pending
Based on the last rate hike in July 2023, a recession is predicted to occur around June 2024.
"The last time the FED raised our rate was in July this year... that means we have to start counting from July this year 11 months from July this year takes us to June 2024"
Pending
If the Fed raises rates again in November 2023 (the last expected hike), a recession is predicted for October 2024.
"if they will raise the rate on November 1st that will probably be the last time so we'll count from November that takes us to October 2024"
Pending
The official economic effects of current interest rate hikes are expected to be felt between June and October 2024.
"so anytime between June to October 2024 is when we'll feel the official effects on average of what these rate hikes are"
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There is an anticipation that many companies will be unable to make their monthly payments when their corporate debt matures and requires refinancing.
"because they're anticipating that when that corporate debt matures and they'll have to refinance a lot of them won't be able to make those monthly payments anymore"
Pending
The top seven companies (Magnificent Seven) are currently propping up the S&P 500; without them, the market would be in decline.
"The Magnificent Seven that's Apple Microsoft Google Amazon Nvidia meta and Tesla The other 493 are not doing as good so if you remove those seven out of the index the stock market would actually be down"
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Historically, a high concentration of S&P 500 value within a few companies has preceded negative economic outcomes.
"historically speaking the more concentrated S&P 500 got among the few the worst things became"
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Before the dot-com bubble burst, the top 10 companies represented 25% of the S&P 500, and the market subsequently lost nearly 50% of its value.
"before the dot bubble burst the top 10 made up only 25% and when that bubble popped stocks lost almost 50% of their value"
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In 2022, with seven stocks comprising 29.1% of the S&P 500, the market experienced a 20% loss.
"The last time that we had had such a huge concentration among the few was in 2022 we had seven stocks make up 29.1% of the index and when the market crashed it lost 20% of its value"
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US consumer credit card debt has surpassed one trillion dollars, reaching its highest level ever.
"the US consumer credit card debt tops a trillion dollars so credit card debt is in fact the highest that it's ever been"
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The personal savings rate has declined as consumers have increased spending due to high inflation.
"over the next couple of years the savings rate dwindled down as people spent more and more thanks to high inflation"
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Approximately 30 to 40 million Americans will need to resume student loan payments of around $300 per month starting in October.
"think about 30 to 40 million people having to pay another $300 per month that starts this month"
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The resumption of student loan payments in October will lead to higher monthly expenses, further squeezing the middle class.
"student loan payments are being resumed in October that means higher monthly payments and that means the middle class is just getting squeezed"
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The inverted yield curve indicates a 61% probability of a recession occurring within the next 12 months.
"yield curve says 61% chance of recessions coming next 12 months"
Pending
The inverted yield curve has accurately predicted 10 recessions since 1955.
"whenever this has happened the yield curve has accurately predicted 10 of the last recessions dating all the way back to 1955"
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84% of CEOs surveyed believe a recession is coming.
"CEOs are at 84%"
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Due to underutilization of office and commercial spaces, some companies may struggle to service and repay loans on these properties.
"all these office spaces and all these commercial buildings that are not in use as much so could they service those payments and pay back their loans some of them will be able to but some of them won't"
Pending