Why WWIII Fears Won’t Stop This Bull Market
Over the weekend, I received many messages from concerned readers about the assassination of Iranian General Qassem Soleimani.
Well, let me put your mind at ease.
This geopolitical event will not make the bull market take a turn for the worse. And in today’s Market Talk, I’ll explain why.
Amber On the Construction Market
The latest U.S. construction spending reading came in strong for November.
Total construction spending popped higher to 0.6% following a revised positive October reading. In all, the latest construction spending number beat estimates. Single-family homes saw the best move as demand for new housing gained momentum.
All while U.S. construction spending saw a boost as well where federal and state level construction spending is concerned. Meanwhile, the latest reading in the Bloomberg Consumer Comfort Index rose to a five-month high based on positive views of the U.S. economy.
This index follows consumers’ feelings about the state of the U.S. economy and their take on their personal finances. The latest reading reveals that U.S. positive sentiment and comfort among consumers with $75,000 to $100.000 per year hit a record. And comfort readings for those 65 and older, college graduates, homeowners and those who are not employed, were all at the highest levels since the year 2000.
Where this week’s economic releases are concerned. There will be five major releases.
On Tuesday, November’s trade balance will post at 8 am. At 10 am, November’s final demand for durable goods orders and November’s factory orders will post. On Friday the December jobs report will post at 8:30 am and wholesale inventories month-over-month final print for November will post at 10 am.
Innovation of The Week Jan 6th, 2020
The 2020 Consumer Electronic Show (CES) kicks off in Las Vegas this week. As a registered CES insider, my email inbox is filled to the brim with behind-the-scenes insights into new technological innovation and products consumers can expect to see in 2020.
I thought for this week’s Market Talk I will give you a taste of what CES has in store for you. First up, get ready for 3D-printed motorcycles. Dynamism, a leader in 3D printing solutions for more than 20 years, will debut its most exciting 3D printers yet at CES.
Their first printer, the Desktop Metal Fiber, prints products two time stronger than steel but weighs less than aluminum. This printer brings automated fiber technology, once reserved for multi-million-dollar machines, to a desktop format at an affordable price. Thus making 3D printing more mainstream than ever before.
Their second printer can print a fully 3D-printed motorcycle. It’s touted as the potential future for additive manufacturing in automotives. The bike is called the NERA e bike and is printed on their BigRep 3D printer. “Over the past few years, additive manufacturing has continued to test the bounds of what can be 3D printed. The NERA ebike was printed in 15 parts on the BigRep 3D printers. It includes airless tires, rims, shocks, steering and more.”
As you know, Paul is forecasting 2020 to be the year of industrial technology innovation, especially in 3D printing. These industrial printing innovations are proving him correct.
Good News Roundup
Good News Roundup story number one: Science Daily is reporting that scientists have developed a new gene therapy technique by transforming human cells into mass producers of tiny nano-sized particles full of genetic material. That has the potential to reverse disease processes seen in brain tumors, Alzheimer’s and Parkinson’s disease.
Good News Roundup story number two: Per HousingWire, U.S. mortgage rates have started 2020 well below last year’s average. The average fixed rate for a 30-year mortgage has slid to 3.72%.
Good News Roundup story number three: Also per HousingWire, foreclosure starts are now at the lowest level of the millennium. According to a report by Black Knight, November’s foreclosure starts marked a 26% decline from last year’s total.
This is the lowest monthly volume since Black Knight began recording the metric in 2000. Nationally, the foreclosure rate fell 3% from October. Hitting its lowest level since 2005.
Paul Dispels Hysteria Related to Iran U.S. Tensions
If you read the Wall Street Journal, New York Times or MarketWatch, you’re hearing a lot about the assassination of Soleimani.
He was clearly a high-level Iranian official that, according to the Trump administration and a number of security experts, was responsible for a lot of bad stuff. That’s just a simple way of putting it. I’ve been on my Twitter since it happened and many people are very concerned.
People are asking me, “Is this it? Will the bull market end because of this trouble with Iran and The U.S.?” I want to answer that today. I can tell you from experience that I have never seen a geopolitical event actually shift the direction of a market. For example, in 2001 we were already in a bear market when September 11 happened.
It didn’t alter the market. It didn’t cause that bear market, just like the Iran U.S. tensions won’t either. That’s because demand and supply for stock is what drives prices higher. However, just looking at it analytically, people are worried that Iran is going to do something to cause World War III.
I have to tell you that, after looking at the facts and data, there is no possibility the Iran U.S. tension causing World War III because Iran is running out of money. Their economy is in near collapse. Oil production is at 10-year lows and inflation is at 30%. Over the last two years Iran’s GDP has declined by nearly 15%. This is not a country that is capable of doing very much.
They are in the throes of chaos at home. And while their focus is in maintaining the integrity of their country, they are not in a position to do anything militaristic. I believe the notion of Iran causing WWIII or even pulling the U.S. into war is very unlikely.
Iran was able to cause trouble in the 1970s, back then the U.S. needed the oil that came from the Middle East. Today, the number one producer of oil in the world is the United States of America. We produce more than enough oil and so no longer need their oil.
That means they have no leverage. There is too much oil in the world. Even after all this Iran U.S. tension hysteria, the oil price has increased by only 5%. Bottom line, I don’t believe anything has changed. I am still bullish, optimistic and positive for the markets.
Again, I believe that we are nowhere near the prospect of war with Iran, and are actually on the verge of taking the stock market to new highs as 2020 progresses.
Here’s one reason: Iran’s oil output has dropped significantly over the last 10 years. As you can see in this tweet I sent on Saturday, it shows how weak the country is today:
this one chart shows you how weak #iran is today. oil production down to 10 yr lows. President #Trump decision to take out #Soleimani could be a turning point for the region. time will tell pic.twitter.com/VX1FF2pAi6
— 🇺🇸Paul Mampilly (@MampillyGuru) January 4, 2020
The Future of the Market in 2020
The markets have gone up a great deal, but understand there is always ups and downs.
There’s no straight lines ever in the market. You can’t say, “Paul you said on this date the market was going to go up but it’s down 1%.” There are going to always be ups and downs any way you cut it. In fact, from everything I am seeing I believe we are setting up for an acceleration.
Amber hinted at the positive future of industrial production above. I really believe that the megatrends that we have been telling you about for nearly four years are creating this lollapalooza effect where one megatrend accelerates the other which accelerates the next.
I’m talking the Internet of Things (IoT), artificial intelligence (AI), block chain, precision medicine, renewable energy, fintech — I could go on and on and on. This is creating the fourth industrial revolution. It’s happening right now. I believe the convergence of these megatrends is going to remake our country and eventually the world.
If you want more details on it, make sure to check into my Bold Profits Daily. I will be focusing on this in the future. Also, if you want companies that are laser-focused on these kinds of opportunities and this kind of growth, you should consider a subscription to my Extreme Fortunes service where we look to get you in to companies at the ground level.
In other words, when they are really small. It’s like buying Amazon in 1995. These companies today are small, but they have incredible potential and they can skyrocket higher. If you’re interested in those kinds of companies that participate in what I’m telling you about, click on the strong hands.
That will take you to a page that will give you all the details you need to find out about my service, Extreme Fortunes, that gets you into these unbelievable, astonishing opportunities.
For more of my thoughts on investing and industry news as it happens, be sure to follow me on Twitter @MampillyGuru.
Editor, Profits Unlimited