As investors look to get back into the swing of things following the Labor Day Holiday and many last minute vacations, their focus remains the same as it has for several weeks, if not months. When will the Fed raise rates again? That is the question that many market participants are still asking.
As we wrote previously, last week’s jobs data was essentially a dud, and recent manufacturing data was also not so great. The services sector also showed a surprising and significant slowdown, further dampening expectations for a September rate hike by the Fed. In fact, the ISM Non-Manufacturing Index declined to a reading of 51.4, the lowest level since 2010.
While the 51.4 reading is still above the “breakeven” level of 50, it is important to keep in mind that the services sector represents about 70 percent of the U.S. economy.
Any significant weakness in services is not a good sign.
While whether the Fed does or doesn’t hike this month or in December has been the topic of much debate, some analysts suggest ignoring all the hype.
Gerald Celente, publisher of the Trends Journal, recently stated in an interview with Kitco.com that “Just as we had forecast back in June that there would be no interest-rate hike despite Yellen’s statement to expect one ‘in the coming months,’ so too we forecast no rate hike until after the U.S. presidential election…if at all this year.”
Celente went on to suggest investors ignore all the rate hike hype, and reiterated his views that gold will be a strong bull market. He stated, “While eight years of massive global central-bank quantitative easing and low-interest rate/cheap-money schemes have boosted equity markets, dismal Gross Domestic Product, wage and productivity data prove central-bank policies have failed to generate true economic growth. Thus we maintain our forecast for equity market volatility and a strong bull market for gold when prices stabilize above $1400 per ounce.”
Could the Fed be crying wolf?
More importantly, does it matter?
These comments highlight what we feel will be a central theme in the next cyclical bull market in gold.
The equity rally is simply built on a house of cards. A house that has a lousy foundation and cheap siding.
Even if the great equity meltdown doesn’t come tomorrow, next week, or the week after, we believe it is only a matter of time. The longer the bull market in stocks continues, and the higher the market gets, the more dramatic this fall may be.
Fortunes will be made and fortunes will be lost.
If you see the fragility of the current stock market rally and the global economy, now is the time to take action. Now is the time to consider some alternative asset classes and to get off the tracks before the train arrives.
Now may be the ideal time to consider hard assets such as physical gold and silver.
Physical precious metals have stood the test of time as a symbol of value and protector of wealth. These metals may potentially provide an effective hedge against numerous economic and geopolitical issues, and could see massive buying if or when the stock market begins to crumble again.
In our opinion, it is only a matter of time before stocks erase much of the gains seen in recent years.
Don’t wait another day before looking at some alternatives. Consider an allocation in physical gold or silver now. These metals may play an important role in your overall investment strategy, and can even be acquired using your IRA account.
Let us show you how. Call 1-800-341-8584 to learn more today.Tags: advantage gold, federal reserve, gold, interest rate hike, manufacturing index, quantitative easing, stock market collapse