Hi I’m Jimmy in this video. We’re gonna walk through a quick review of where the US economy stands. We’re using various economic indicators to see if we can objectively gauge where the economy stands. And in theory hopefully this could lead us to making a better investment decision should we invest now. Or should we wait for the stock market to crash which we know will eventually happen. Now I’ve done a few macroeconomic videos recently and I think it could be useful to keep the results of that analysis in the back of our minds for this video. So we’re going to stick our kick off our scorecard with the Federal Reserve injecting capital into the Reaper market. They’ve been doing that on a daily basis. They’ve been doing it for a few weeks now and clearly the fact that they need to do that is a sign of weakness. So we give one point to the Bears because it seems that that might go on for at least a while. OK. One point for the Bears then we did an analysis of the spread between the dividend yield of the S&P 500 and the 30 year Treasury bond yield and impressively we saw that whenever there was a major dip in the spread meaning that the dividend yield of the S&P 500 was relatively high compared to the yield of the 30 year Treasury bond. Well it turned out to be at least a short short term bullish indicator and the market tended to rally at least in the short term whenever there was a dip in the spread. And as we could see with this chart right here well right now the spread is fairly low. And this we have to consider that this could be at least a short term bullish indicator. So we give the bulls one point there. OK then our final sign from a recent video and by the way that links to all of these videos in the description below. If you’re interested in seeing those. OK so a few days ago I did a video titled What will cause the next stock market crash. And in that video we focused on consumer confidence. Now this is a chart of consumer confidence going back the past couple of years and yes consumer confidence in the US is fairly high right now from a broad perspective. Plus there was some jump in the most recent number for consumers confidence numbers. But we’re coming off a low. This was the lowest level since 2016. Now I don’t think that this is a negative sign just yet but I do think it’s important for us to watch because if we consider some of the larger economies in the world well we can see that many of those have been dropping off for a while. So right now a lot a significant amount of pressure is on the US consumer to keep things pushing forward. So far they’re OK but that could turn negative in a hurry. So I think for this one we should make that a neutral point. OK. So what new economic data do we have. Let’s look at manufacturing. So as we could see manufacturing has really been crushed recently. And the way this indicator works is it all revolves around 50 50 is the key level. So when the indicators started falling right here there was still growth in manufacturing but that growth was declining but once it dropped below the 50 level now we’re talking about negative growth. So as we could see it’s dropped below it and it still seems to be declining. So clearly this is a negative sign for the economy and therefore a point for the bears. Now I don’t think it’s terribly surprising that manufacturing will be bad when we consider the pressures of the trade tensions around the world. And in general much of the global economy has begun slowing. So U.S. manufacturing be down being down probably isn’t too surprising. OK. Now let’s jump over to the yield curve or more accurately put the inverted yield curve. So this is an important one. So the inverted yield curve is a fantastic indicator because all U.S. recessions have been preceded by an inverted yield curve. So here’s the basics of how this works. Each dot here represents a different time period. So we have three months two years five years 10 years and then 30 years. So if we invest our money for three months while the three month Treasury would pay us about 2 percent on an annual basis. But if we invest for 10 years. Well right now it would pass about one and a half percent on an annual basis or as of the date of this chart. Clearly this isn’t right because if we’re going to lock up our money for a longer period of time we should get paid we should be compensated for risking our capital for longer. Now this way the yield curve is supposed to look. So the fact that right now short term rates are higher than long term rates is why they call it an inverted yield curve. And like I said nearly every recession has been preceded by an inverted yield curve. Now as you can see here this a yield curve from September 2nd and this is an important day because there were two inversions happening on this day. The first one is here the two year over the 10 year. You can’t really tell but here we go. The 2 year is a little bit higher than the 10 year and then clearly the three month is way higher than the 10 year. So we have to inversions which is two bad signs. The economy right now. But this is September 2nd. So if we fast forward this a bit. Well now we could see that every day up until today. Since September 2nd is actually before that when they first inverted. But since this happened every day the three month yield has been higher than the 10 year. So this brings us to today. And right now we can see that the yield curve is still inverted. So clearly this is a bad sign for the economy. And this point goes to the Bears and this brings us to the main question should we invest now or wait for the stock market to crash. Well when we look at our scorecard we can see that overall things seem quite negative. I believe a ton is riding on the US consumer to continue to keep the very long the very extended bull market going. The Fed is cutting interest rates and they’re likely to keep cutting interest rates. I would expect them to cut at least one more time depending on the news that comes out and that’s supposed to help the economy. I think the trade tensions could continue to put pressure on manufacturing and that could keep pressure on the economy in general. So as far as do we invest now my biggest issue remains timing. Personally I’ve thought that things have looked suspect for a year or two now and then when the S&P had a very bad December I don’t know if you remember last December but they had a really bad December and I was thinking OK here we go. And this is what the S&P 500 has done year to date year to date it’s up almost 19 percent since December thirty first. So if we were spooked about the economy back then we decided to stay out of the stock market well we would have missed this entire run. In fact I’ve heard people talking about an imminent crash in the stock market for three or four years now and over the past three years the stock market is up more than 45 percent. So again the issue remains timing. I personally believe for myself that putting money to work as soon as possible is far better than waiting for the perfect time to put it to work. Now that’s not to say that it shouldn’t be invested in a smart manner. I think that we can invest in things that have historically done well during stock market pullbacks. I’ve got a few videos on that topic if you’re interested but what do you think. Do you think that the stock market crash. Obviously it’s going to crash at some point but do we think that it’s so imminent right now that it makes more sense to sit on the sidelines. I’ve heard I’ve seen in the comments on many of the videos people talking about a time in the market is better than timing the market. And I’m a firm believer in that concept. I think finding good solid investments and sticking with them and holding them for a long time is generally the smartest thing to do. But what do you think. Do you think that we should invest right now despite the fact that there’s a lot of question marks happening in the market please. I mean don’t you think in the
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