Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

An Economic 'Sell' Signal by Christmas?

Economics / Recession 2013 Nov 13, 2012 - 01:54 AM GMT

By: Clif_Droke

Economics

Best Financial Markets Analysis ArticleWith the U.S. presidential election out of the way, the economy has taken center stage lately and for good reason: the economy typically benefits during a presidential election year while the 4-year Kress cycle is also peaking. The latest economic reports strongly indicate that the U.S. consumer has benefited (or at least feels he has benefited) from this year's presidential cycle and the loose money it typically brings.


The 4-year cycle peak is over, however, and year 2012 is coming to a close. Unless the Obama/Bernanke administration can pull an ace from its sleeve - and soon - 2013 is looking to be far bleaker than 2012.

Earlier we mentioned the positive payroll report that was released on Friday. The U.S. economy has become a source of optimism in the mainstream financial press lately, helped by improving numbers in the jobs market, retail sales, real estate prices and consumer confidence. By one measure of consumer confidence, consumers haven't been this optimistic about the economy's prospects since 2007. Retail sales have increased for three consecutive months, while the U.S. savings rate fell from 4.4 percent to 3.7 percent from the end of June to the end of August. Clearly, the typical American consumer is feeling better about the economy.

Businesses don't share this sentiment, however. Companies of all sizes are reducing the number of investments they make, causing capital spending to drop. According to Bloomberg Businessweek, "Orders for non-defense capital goods, a proxy for expectations of future business spending plans, fell at an annual rate of 17.8 percent from July to September, the steepest decline since the first quarter of 2009, the last few months of the recession."

Businessweek further pointed out that company CEOs are gloomier on the profit outlook than they've been since the third quarter of 2009 and foresee slower economic growth for 2012 and have lower expectations for sales, capital expenditures and hiring. As one analyst observed, "Corporate earnings do not paint the picture of such a positive consumer that we're seeing."

Although there is not a definite correlation between consumer spending and corporate spending, businesses do tend to be more forward-looking than consumers. Could it be that corporate America sees something on the economic horizon that consumers don't see - something that has made corporations fearful of spending?

The year 2012 has been a relatively good one for the economy but keep in mind that after the 4-year cycle peaks the momentum behind a strengthening economy tends to wane. The first year of a presidential cycle is typically one of the worst and that doesn't bode well for the 2013 outlook.

What I find somewhat troubling is that while our in-house New Economy Index (NEI) is still technically in a rising trend, it has been weakening in recent weeks and has already fallen below its 12-week and 20-week moving averages for the first time since 2011. If the 12-week MA falls below the 20-week MA while the index itself is declining we'll have the first economic "sell" signal since early 2010. That in turn would bode ill for the 2013 outlook and would pretty much confirm the bearish picture the Kress cycles paint for next year.

New Economy Index

The NEI is still a few weeks away from completely rolling over and likely won't give a sell signal before Thanksgiving. If it does confirm a sell signal by the end of this year then we'll be able to say that the latest spate of bullish economic headlines was a classic case of everything looking rosy at a top. We might also say that, as is often the case, presidential election years can paint a very deceiving picture of the economy.

2014: America's Date With Destiny

Take a journey into the future with me as we discover what the future may unfold in the fateful period leading up to - and following - the 120-year cycle bottom in late 2014.

Picking up where I left off in my previous work, The Stock Market Cycles, I expand on the Kress cycle narrative and explain how the 120-year Mega cycle influences the market, the economy and other aspects of American life and culture. My latest book, 2014: America's Date With Destiny, examines the most vital issues facing America and the global economy in the 2-3 years ahead.

The new book explains that the credit crisis of 2008 was merely the prelude in an intensifying global credit storm. If the basis for my prediction continue true to form - namely the long-term Kress cycles - the worst part of the crisis lies ahead in the years 2013-2014. The book is now available for sale at: http://www.clifdroke.com/books/destiny.html

Order today to receive your autographed copy and a FREE 1-month trial subscription to the Gold & Silver Stock Report newsletter. Published twice each week, the newsletter uses the method described in this book for making profitable trades among the actively traded gold mining shares.

By Clif Droke
www.clifdroke.com

Clif Droke is the editor of the daily Gold & Silver Stock Report. Published daily since 2002, the report provides forecasts and analysis of the leading gold, silver, uranium and energy stocks from a short-term technical standpoint. He is also the author of numerous books, including 'How to Read Chart Patterns for Greater Profits.' For more information visit www.clifdroke.com

Clif Droke Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules