UPDATE: 2020 Stock Market Predictions
[UPDATE] – China still needs a trade deal more than us.
The country’s economy is dependent on exports while the U.S. economy is based on our own domestic demand.
For the U.S., consumer spending is key and that’s soaring because of the millennial generation, buying houses, and spending their rising income.
I’m still bullish on our stocks that exposed to the big Mega Trends.
Keep up with my latest thoughts by following me on Twitter @MampillyGuru
August 12, 2019
Amber Lancaster: Welcome to this week’s Market Talk. I’m Amber Lancaster, joined by Paul Mampilly. Each week we look forward to sharing our viewpoints and giving insight into what’s on our radar. Today’s outlook is for the week of August 12, 2019. I’ll begin by sharing with you what I’m watching and then we’ll hear from Paul.
Today I’ll cover three major topics. The first will be my take on recent economic news and upcoming releases. Then I’ll highlight my innovation story of the week. I’ll wrap things up with our Good News Roundup and our Disruptification Index performance numbers. Let’s begin.
First off, as the U.S.-China trade war continues we have several economic indicators to pay attention to this week. The most relevant will be July’s retail sales print posting on Thursday. Per Bloomberg data, there will be one element of the retail sales data that will be of most interest: online consumer sales.
As you may recall, on July 15-16 one of the biggest global shopping events of the year took place, Amazon’s Prime Day sale. It was touted as a two-day epic parade of deals. It is anticipated by economists that Amazon’s Prime Day will have a notable impact on July’s retail sales print.
Per Bloomberg data, Amazon Prime Day sales leaped from 100 million items in 2018 to 175 million items this year. This very interesting graphic shows the top-selling Prime Day items per country. It was the LifeStraw personal water filter. This filter removes bacteria, parasites and microplastics from any water source.
Per Amazon’s website, for every LifeStraw product purchased a schoolchild in need receives safe drinking water for an entire schoolyear.
Moving on to economic releases this week. There will be six major releases. On Tuesday, Consumer Price Index (CPI) month over month for July will post at 8:30 a.m. On Thursday, retail sales advance month over month for July will post at 8:30 a.m. Empire manufacturing for August will post at 8:30 a.m. and industrial production month over month for July will post at 9:15 a.m.
On Friday we will see July housing starts released at 8:30 a.m. The University of Michigan sentiment preliminary reading will post at 10 a.m.
My innovation story of the week highlights a new digital payment technology that’s being introduced in the trucking industry. I must admit I like keeping an eye on what’s going on in the trucking industry. Not just from an economic point of view or perspective. Ever since I was a kid I always had a fascination with trucks.
Big rigs, 18 wheelers, like Mack, Freightliner, Peterbuilt, Volvo, you name it. I like those types of vehicles. It’s their size, their power, mobility and the longevity of their engines. With that being said, Daimler AG’s truck division has just announced they created a digital wallet for commercial vehicles.
This digital wallet called Truck-ID will work in tandem with another digital payment called Truck Wallet. This system will allow a variety of functions including automatic toll payments and an overall aim to ease the stress of commercial vehicle drivers.
DetroitBureau.com reports that the head of the Truck Wallet program states, “With Truck-ID and Truck Wallet, we have laid the foundation for autonomous interaction between trucks and other machines — a true technological milestone. Our aim is that, in future, trucks will be able to act on their own behalf in various fields of application. Drivers can then concentrate more on their actual driving tasks and haulage firms benefit from a significant reduction in administration work and more secure processes.”
Here are three good news headlines to carry with us throughout the week. Good News Roundup story number one: Realtor magazine is reporting that Americans have never felt this good about real estate. Their proclamation is based on a Fannie Mae Home Purchase Index.
This index rocketed to a new high as consumer became more optimistic about buying and selling, as well as mortgage interest rates and employment. Five out of the six components that comprise the index actually rose month over month.
Good News Roundup story number two: According to MediaPost.com, Amazon’s self-driving delivery robots are hitting the streets in California. A wheeled robot vehicle known as Amazon Scout has been making deliveries to customers just outside Amazon’s headquarters in Washington State.
The robot will begin customer deliveries in Southern California. Sean Scott, vice president of Amazon Scout stated the following, “We’ll start with a small number of Amazon Scout devices, delivering Monday through Friday, during daylight hours. Customers in the Irvine area will order just as they normally would, and their Amazon packages will be delivered either by one of our carrier partners or by Amazon Scout.”
Good News Roundup story number three: The Reason Foundation is reporting that pestilence, war, famine and death are all on the decline. Their recent article entitled “Impending Defeat of the Four Horsemen of the Apocalypse” states that the average life expectancy at birth hovered around 30 years for most of Earth’s history.
Now they are reporting by the year 2100, the global average age will reach 92 years. They also found, per World Bank data, that food production since 1961 has essentially quadrupled while global population has increased two-and-a-half times.
Turning to our Disruptification Index, as this table shows, our index continues to outperform major indices year to date. It’s up 28.9% versus 19.9% on the Nasdaq and 12.1% on the Dow.
That’s it from me today.
Thanks, Amber. This week is a quiet week in the IPO world. There’s two IPOs coming from China, which we are going to stay away from. There’s a lot of issues happening right now in the China currency/trade wars, as well as the Hong Kong dispute starting to escalate.
Not the best week for those companies, but what we are seeing is that in the last week we had $25 billion coming out of retail equity funds. This was the second-most in 17 years. Usually that’s an indicator of extreme negativity amongst the retail investor. That usually turns around. When it does, there should be a big boost for smaller-cap stocks.
I’m watching that this week. Also there are extreme readings on the bull-bear indicating that individual investors are more bearish than they’ve been in a long time, which is a good contrarian indicator as well. We think both those things bode well for the markets. I’m watching that this week and expecting a good performance.
I’m looking to see how this China situation breaks out this week. I know it’s the source of most of this uncertainty right now. Uncertainty creates opportunity and I think we’re going to get that on the backside of this. In the meantime, it’s going to be a little choppy. That’s what I’m seeing this week. Over to you, Paul.
Paul Mampilly: You’re right, there’s been in the Extreme Fortunes service just like IPO Speculator, we’ve seen a lot of volatility. You’re right, this is usually an indication of people flushing out a lot of positions. That bull-bear indicator you were talking about is a very good contrarian indicator.
Generally speaking, the regular retail investor is the last to sell and the last to panic. Often you can see it in the smallest stocks because they are often the holders of those stocks. We’ve seen quite a lot of movement. And in your stocks as well, right?
Yes, a lot. For instance, today I saw that last week Upwork reported and the earnings were really good. They were up more than 10% on the day. The next day, no news, they were down 10%. I saw that Benchmark Capital, one of the VCs that funded Upwork, sold out of it.
They clearly used it as an opportunity to liquidate. That’s not a negative thing, that’s what they do. They are a venture capital firm, not a private investor. They were going to liquidate eventually and they took the opportunity off of good earnings. Now it’s on sale for 10% less and I think people are going to buy it back up.
Paul: That also tends to create a strong hands situation. At cheap prices you need a lot less money to buy. Someone who really knows that company is going to take that position in at that moment. In general, it’s a quiet time.
People are waiting for developments on the China front. If you look at the Chinese economy, they are claiming their economy grew at 6%. However, there is news coming out about their companies living off IOUs — all kinds of things that suggest there is a much greater level of distress than what is being reported.
On the flip side, in the United States, we seem to really be wanting to report the negative stuff. Consumer spending, which is one of the best reflections of confidence, is incredibly strong. It’s telling you that people actually feel pretty good.
Amber mentioned housing. You never want to go put down a large down payment, sign up for 30 years of paying a mortgage unless on some level you feel confident. It’s another sign that there is an internal strength to our economy that is largely going under the radar. The last thing is unemployment.
Unemployment in this country is, I believe, actually lower than being reported. Every person who comes to work at my house or when I drive by there is a sign that says “help wanted.” Everyone is looking for people who can help them out in their company and their business, irrespective of their size.
For a business, that’s a bit of a mixed blessing because you can’t expand unless you have the people. However, for someone who is an employee, it’s great. It means your wages are set to go up. I am incredibly optimistic. I have seen all of this as being part of a panic that began in 2018.
We had a little recovery. We have a second panic about the tariffs. What is happening now is there is a stockpile of cash sitting on the side. There is an incredible quiet confidence there. Based on people and the fact that they have jobs, they are spending, they feel good about their largest asset — their house.
It tells you that I believe no recession is coming even though a lot of folks on the institutional side have prepped portfolios for a recession. There is no recession coming. Inflation rates are going down. If you look at it from a different angle, in my judgment this is one of the best times to invest.
I believe that stock prices six month, nine months or one year out, we are all going to look back and say, “What were we thinking? They were so cheap.” The Disruptification Index is a great example of it because it has companies of the new world that are growing, showing rising growth and people are adopting their solutions and services.
I’m incredibly optimistic. While on this note, I want to mention that this week there is a deadline for one of our services. It’s called Rebound Profit Trader. It’s a phenomenal service done by Ian Dyer and myself. I spoke to Ian before and I believe he’s had seven trades in a row generating 20-40% in about two weeks or less.
It’s an unbelievable service using the option market to take advantage of these dips and make phenomenal trades. If you’re interested in that, take a look at this card sitting right above my shoulder. Click on it and it will take you to the link and show you everything you need to know to sign up.
Check into Rebound Profit Trader. With that, back to you Amber.
Amber: Thank you, Paul. Great insights as always. Thank you to our viewers for tuning in this week. We wish you a good, productive week. Until next time, take care.
“What were we thinking?”
2020 stock market prediction: Mark my words, six months from now, this will be the No. 1 question the doom-and-gloom media economists will be asking as they wonder why they didn’t get in on this historically low bull market.
The market thrives on fear and uncertainty, which is exactly what’s driving the market as investors await developments in the U.S.-China trade war.
Right now, there’s a huge difference in what the U.S. market tends to focus on versus what China focuses on. You see, China highlights its positives, while the U.S. highlights our negatives.
If you look at China’s economy, you’ll see that it’s claiming 6% growth, despite news that suggests a much greater level of distress.
On the other hand, although the U.S. focuses on negative headlines to drive market manipulation, there’s a silent strength to our economy that Wall Street doesn’t want you to know about.
However, all of that changes today as I lay out each factor fueling the strength of our economy.
If you look at the Bull-Bear Indicator as discussed in today’s video, you can see that individual investors are more bearish than they’ve been in a long time, which is a great contrarian indicator.
While others view this as a time to panic and sell out of the market, we here at Bold Profits view this as the perfect opportunity to be the Strong Hands Nation that I always encourage readers like you to be.
Sit through the volatility. That way you take advantage of the low prices in the market.
Otherwise, you’ll look back in January in the midst of the market’s massive rebound and wish you had stayed in to make the big gains.
Editor, Profits Unlimited
P.S. P.S. For the first time, I’m giving you a chance to look over my shoulder to see firsthand the investment strategies that let me say good-bye to Wall Street and semi-retire in my early 40s. It can all be yours for less than the cost of a steak dinner.
This post was updated on October 2, 2019.