By Graham Summers, MBA | Chief Market Strategist
If you’re looking for a reason why the U.S. hasn’t slipped into recession yet, the answer is simple…
Uncle Sam is propping up the economy. And it’s working… for now
Some items of note:
- Since, mid-2021, public sector job growth has outpaced private sector job growth.
- Government transfers (social spending) accounted for 40% of the growth in income in 1Q24 and was the single largest contributor to personal income growth in 20 states.
- In June, the government accounted for 1/3rd of all job gains.
- When you add private sector jobs that are funded indirectly by the government, (healthcare, education) Uncle Sam accounted for 74% of ALL jobs created in June!
As I mentioned earlier, the government is propping up the economy via hiring and social spending. This is why the U.S. economy refuses to break down into a recession despite weakness in the private sector.
Small wonder then that stocks keep ripping higher. The S&P 500 has hit new all-time highs in each of the last five weeks!
Put simply, this is a raging bull market courtesy of an economy that is being propped up abject government spending that is funded by the largest deficit as a percentage of GDP in the history of the U.S. (outside of WWII).
At some point this situation will end… BADLY. But in the meantime, we need to ignore all the doom and gloom and ride this bull market for as long as possible.
Think about the raging bull market that occurred in the early ’00s. The first signs of the Great Financial Crisis appeared in mid-2006. Those who panicked based on this, had to wait another 20 months as the market rose another ~30% before stocks finally began to break down.
Remember, as investors, our job is to make money, not look for any excuse to dump stocks and panic about something bad happening. And as I’ve outlined in recent articles, this means riding bull markets for as long as possible, and then side-stepping bear markets when they eventually hit.
In the very simplest of terms, you need to be invested in stocks, until an objective, verifiable tool (not your feelings or limiting beliefs) tells you it’s time to “get out.”
I’ve developed a tool that takes ALL of the guessing work out of this problem. With just one look at this tool, you can tell whether it’s a good time to buy stocks or not. I detail it, along with what it’s currently saying about the market today in a Special Investment Report How to Predict a Crash.
To pick up a free copy, swing by
Best Regards
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research
