Here's the Deal - September 29, 2024

Economy: In Slowdown

Market Cycle: Bullish

_{Week 39 of 52 for 2024: 75% of the way through 2024}

Weekly Note:

Edge: Knowledge that most others are not aware of that you can use to profit.

Like knowing weeks in advance that a dockworkers' strike is on the horizon, long before most people even hear about it. This kind of insight is exactly why I started this newsletter. As a former news junkie, I was constantly disappointed by how late the corporate media caught on to important issues—and how often they missed the mark when they tried to catch up.

This week, the potential port strike gained widespread attention, as it now seems almost certain to begin on Tuesday, October 1st.

If your business relies on products typically shipped through East Coast ports, the way you handle this situation in the coming days could significantly impact your performance over the next quarter or two. If you haven’t already been thinking about it, now is the time to put this issue front and center. A prolonged strike wouldn’t just slow down economic growth—it would likely lead to higher inflation, as fewer products on the market drive up prices. This is a major event and currently the most critical economic story. In fact, it’s more important than the upcoming election, and by a wide margin.

On a brighter note, we saw some unexpected good news last week with China’s surprise and aggressive stimulus package. This move has already boosted copper prices, though oil has yet to join the rally. However, betting against oil showing up might be risky, as rising commodity prices are a characteristic of Economic Slowdowns.

One significant development reported last week is the confirmation that the U.S. economy did not experience two consecutive quarters of negative GDP growth in the first half of 2022. The final revision until 2028 for Q2 2022 shows positive GDP growth. Even before this revision, there was never a strong case for saying the U.S. was in a recession in 2022—largely because unemployment never surged, and that’s a key feature of a true recession. Without widespread job losses, the label “recession” loses its bite. Recessions are painful because they lead to unemployment, so if people aren't losing jobs, why should we care? Now, with the revised data, there’s no room left to argue: the U.S. was never in a recession in 2022. Also, don’t fall into conspiracy theories—data revisions are a normal part of economic reporting.

If you enjoy watching doomsayers and fraudsters scramble, the coming months should be entertaining. The residential real estate sector is showing signs of stabilization and is likely moving into its recovery phase. Expect to see some people throwing tantrums as real estate helps prop up the U.S. economy—they’ll claim it’s impossible, but it’s actually a typical part of the credit cycle at this stage.

Real Estate Agents, this is your moment. You've faced ridicule, blame, and criticism over the past few years. With the recent NAR lawsuit and industry challenges, it’s been a rough time for the sector—arguably tougher in some ways than the 2008 crash. But the next six months should prove that we’re at the bottom of this cycle. Your hard work and perseverance are going to be a big part of what helps the U.S. economy grow over the next 6 to 18 months. Mortgage rates are close to falling below 6% and more than likely will drop further, giving the housing market even more room to recover.

A resurgence in residential real estate activity spurs economic growth as selling and buying homes leads to spending in other big ticket items such as building materials and appliances.

We may have our challenges, but that is always the case. It may seem worse now, but it always does as it’s easier to look back and find solutions than it is to find them in real time.

As is always the case, the leaders of tomorrow will get there by keeping their composure now.

Top Economic Stories of the Week:

***More articles will be posted in the comment section to ensure the initial email is not too big to deliver to your inbox.

Most Important Data Drops from the Past Week:

This Week in Markets

Volatility has stayed elevated, even as markets continue to climb—something I highlighted a few weeks back. Most people aren’t aware of this, or why it’s happening, but you are, because you’re smart and you read Here’s the Deal every week. In time, everyone else will catch on and pretend they knew all along. But you’ll know you had an edge. As a wise man once said, “That’s how winnin’ is done!”

This week may have appeared subdued if you were only watching the indices, but beneath the surface, there were significant moves—breakouts, follow-throughs, and improving setups everywhere. This was one of those weeks that separates those who truly understand the market from those who merely think they do. The same people who missed earlier recoveries are likely missing out on huge gains in copper, uranium, space exploration, and high-growth companies.

It’s becoming increasingly clear that the markets have chosen their path for the rest of the year, continuing the nearly two-year-old bull market.

If you’re a trader or investor who missed some of the recent, picture-perfect setups, there’s good news. As the old Wall St. adage, “Sell Rosh Hashannah. Buy Yom Kippur” is at hand this week. With Rosh Hashanah beginning on Wednesday, October 2nd, and Yom Kippur the following week (October 11–12), there might be a window to initiate or add to positions in stocks that are primed to surge for months ahead.

The market rotation over the past several months has been nearly flawless, and this rotation is the lifeblood of bull markets.

Yes, there’s turmoil in the world—it’s always there. The news will try to distract you, but don’t lose focus. By the time the masses hear about stocks doubling or tripling, the big moves will already have happened. That’s when many become exit liquidity for those buying right now. This is how the system works: the corporate news and conglomerates try to keep you locked into a false worldview to control your thoughts and actions for their benefit.

But here’s the truth: success requires stepping outside that narrative. It’s time to cut out what’s holding you back from achieving the life you want. You have the power to do it, and I bet you can find something in your life to replace which is not helping you achieve the life you want.

The Week Ahead

Economic Data:

Earnings to watch:

WTF of the Week

Quote of the Week

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