Trouble Brewing in the Economy and Markets... with David Moadel
welcome to looking at the markets with David Modell well we had a correction in
the S&P 500 in February and the market has been the stock market has been going
either sideways or upwards ever since we're hovering near all-time
highs is this justifiable is it sustainable
let's take a look at the economy see how we're doing well right now in the United
States we have a debt to GDP ratio of over a hundred percent this is trading
economics calm I want to give them credit and about ten years ago the debt
to GDP ratio was more reasonable and now and this has been going on for a little
while and it's just getting worse over time
we now the United States we now owe more than we produce that's not good and it
does not justify a stock market hovering near all-time highs how about the future
this is the present and the past how about the future well according to C ATO
Cato org and according to this chart the US is
now the only advanced country projected to see a rising debt to GDP ratio in the
coming five years so we saw that it's been over a hundred percent for a while
now and according to these projections look at all the other countries in the
world and look at the United States it's just going to get worse all the way
through 2023 according to Cato org and their research
what else am I seeing in the economy well the US inflation rate over time is
just getting higher and higher in fact it's it has jumped quite a bit in the
past quarters according to trading economics calm and their research and
that's not good for the consumer because consumers cannot afford to make as many
purchases and the consumer cannot contribute to the economy which is not
good for the economy and also rising inflation also causes
the Federal Reserve generally speaking causes the Fed to
raise interest rates in order to keep up with inflation they have to keep bond
yields Treasury yields up with inflation otherwise people are not going to buy
Treasuries from the United States government and so when we have a
sustained increase or jump in the inflation rate that tends to cause the
Fed to raise Treasury yields bond yields and the US stock stock market does not
like that it gets nervous it gets scared if and when the Fed raises interest
rates which I project it will do it must do it in order to keep up with inflation
and so I see that happening in the near future and here's another thing we
should look at this is fin vis it is a stock screener that I like and usually
when I go to the descriptive tab and I tide enter in mega caps you know those
large companies those large large extra large cap companies the big ones the
famous ones the apples and Amazon's of the world the Dow stocks are generally
in the in the mega cap category and then I go to technicals and I'm looking for
let's say I'm looking for mega caps that are 50 percent or more below their 52
week high so in the bottom half compared to their 52 week I results none no mega
caps fit that description all right I'll be a little bit I'll be a little more
lenient a little more relaxed let's go for 40% below their one-year 52 week
high nothing all right let's be a little more lenient how about 30% or more I'm
getting a little desperate here nope there are no bargains in the stock
market as we can see at least among the really famous companies how about 20% or
more are below the 52-week i won we got facebook here i've had to go all the way
up to 20% or more below the all-time high so there's one company 20% or more
below its all-time high among mega caps how about 10% or more let's see can we
at least get a few 14 all right yeah we got Alibaba Chevron Facebook again and
tell a few more only 14 mega cap companies are 10% or more below their
52-week high that means that the big companies are all trading near almost
all trading near their all-time high I should be able to get some in the 30s
40s and 50s below their all-time high there should be some bargains out there
there are none they're all trading near their 52-week highs or at least the vast
majority of them are I shouldn't have to work this hard to
find a bargain in the markets if you're thinking about going long the S&P 500
the Dow the Nasdaq the Russell anything like that I would say in my opinion you
have to make your own decisions I'd say this is not a time to do it not a time
to get started if you've been in for a long time and you want to stay there
actually I don't even recommend that it's a great time to start in my opinion
start taking a little bit off the table scaling out a little bit consider some
alternative investments and if you'd like more information about that you can
email me at any time I can help you with your portfolio my name is David Modell
my email address is David Modell at gmail.com do I see trouble ahead well
I'm just gonna let the facts speak for themselves because I'm only presenting
the facts here I inform and it's up to you to make your decisions well I'll
tell you what if you like this video please give it a thumbs up on YouTube
and comments tell me what do you think do
you think the economy in the United States justifies these near all-time
highs in the stock market should I have to work this hard to find bargains is
that normal what do you think tell me in the
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I'll talk to you again soon