An important event with Louis Navellier next Tuesday … the growing risk of the Fed slow-playing cuts … why Luke Lango believes they’re coming in September If you’re over 50, legendary investor Louis Navellier has as message for you…
You’re about to see an epic financial mania – potentially, the last great one of your lifetime.
Now, clearly, this has its pros and cons.
Here’s Louis’ hot take on the pros: In the coming weeks, I expect a flurry of investments I just found (which you’ve probably never heard of before) to ignite the biggest financial mania of my 47-year career.
It’s already creating millionaires at the fastest rate I’ve seen since the late 1990s. Unfortunately, this “pro” is intertwined with the “con”: It will destroy almost everything you hold dear about America…
In short, I predict the dot-com mania is about to repeat… with a strange new twist most people will never see coming. Next Tuesday at 8 PM Eastern, Louis is holding a live event to detail what’s happening, why it could be the last explosive market mania that older investors will see (and which type of stocks are going to soar the highest), and the associated “destruction” it will usher in.
We’ll bring you more details over the coming days, but to reserve your seat for this free presentation, click here.
Back to Louis: What’s coming will open a moneymaking opportunity on a scale I haven’t seen in two decades… in a way that’s going to surprise a lot of people and leave you on the sidelines if you don’t see it coming.
At the same time, it will lead to the rise of a “New America” that’ll be almost unrecognizable to anyone from our generation. Here’s the sign-up link again. We’ll be back with more details in the coming days. ADVERTISEMENT  A historic financial mania is coming. It’ll open a unique new investment vehicle on a scale he hasn’t seen since 1994, which could double your money 6 different times if you get positioned on Tuesday, June 25.
Click here to learn more (and to get his #1 pick). Switching gears, perhaps the biggest risk in today’s market is that the Fed slow-plays rate cuts Here’s our hypergrowth expert Luke Lango: This Fed presently does not feel any urgency to cut interest rates.
But recent economic data suggests that they should get some urgency soon.
[Last week], we learned that jobless claims in the U.S. economy soared to a nine-month high. [Last Friday], we learned that Consumer Sentiment in the U.S. economy plunged to a six-month low and is currently in the midst of its biggest three month drop since summer 2022.
That data adds to a long list of evidence that the U.S. economy is slowing rapidly right now.
The list is growing so long that investors are worried that if the Fed doesn’t cut rates soon, the economy will spill into a recession. Luke isn’t the only analyst who believes the Fed needs to move faster. In fact, the woman who created one of the most frequently referenced recession indicators just said the Fed is “playing with fire” by not cutting rates.
I’m referring to Claudia Sahm, former Federal Reserve economist and the originator of the “Sahm Rule” – a recession indicator related to the unemployment rate.
It compares the latest three-month average of the unemployment rate with the lowest three-month average over the past year.
When the latest three-month average is 0.5 percentage points higher than the lowest three-month average, the Sahm Rule triggers, suggesting the beginning of a new recession. As we’ve detailed here in the Digest, the Sahm Rules hasn’t triggered yet, but Sahm is increasingly concerned Today, the Sahm Rule reading comes in at 0.37%.
We’re still below the 0.50% line in the sand, but as you can see below, the indicator has been rising toward the trigger level since 2021, and Sahm isn’t pleased.  Here’s CNBC: The Federal Reserve is risking tipping the economy into contraction by not cutting interest rates now, according to the author of a time-tested rule for when recessions happen…
Sahm, chief economist at New Century Advisors, said the central bank is taking a big risk by not moving now with gradual cuts: By not taking action, the Fed risks the Sahm Rule kicking in and, with it, a recession that potentially could force policymakers to take more drastic action.
“My baseline is not recession,” Sahm said. “But it’s a real risk, and I do not understand why the Fed is pushing that risk. I’m not sure what they’re waiting for.”
“The worst possible outcome at this point is for the Fed to cause an unnecessary recession,” she added. The article went on to note that even with the rising jobless level, Fed officials have expressed little concern about the labor market.
For example, after its meeting last week, the FOMC described the jobs market as “strong.” Plus, at his press conference after the meeting, Fed Chair Jerome Powell said labor conditions “have returned to about where they stood on the eve of the pandemic — relatively tight but not overheated.”
But Luke recently called out this “strong” labor market as being misleading. ADVERTISEMENT  On June 12th, a legendary investor revealed a breakthrough income strategy designed to pull $5,000 a month (even if you have a small account).
Click here for full details on this fast-moving story. Why the labor market is weaker than last week’s jobs report suggested To explain, let’s go to Luke’s Daily Notes from Early Stage Investor: The “jobs report” is determined from two surveys: The establishment survey (“hey businesses, how many people are on your payrolls?”) and the household survey (“hey people, how many of you have jobs?”).
The headline job growth number that is reported all over the media is from the establishment survey. It showed a gain of 272,000 jobs in May.
But the household survey actually showed a loss of 408,000 jobs in May. That’s because the number of people saying they had full-time jobs dropped by 625,000 in May, while the number of people holding part-time jobs rose by 286,000.
Therefore, it is our assessment that the May jobs report was only “strong” because more people are taking on multiple part-time jobs, thereby inflating the establishment job growth numbers. Meanwhile, full-time job holders are in decline and the unemployment rate is rising.
Obviously, that’s not healthy. Obviously, that’s indicative of a weakening labor market – not a super-strong one. Beyond this discrepancy between the establishment report and the household survey, Sahm highlighted another reason the Fed should act soon: the rate of change in the labor market.
Back to CNBC: Sahm said Powell and his colleagues “are playing with fire” and should be paying attention to the rate of change in the labor market as a potential harbinger of danger ahead.
Waiting for a “deterioration” in job gains, as Powell spoke of last week, is dangerous, she added.
“The recession indicator is based on changes for a reason. We’ve gone into recession with all different levels of unemployment,” Sahm said.
“These dynamics feed on themselves. If people lose their jobs, they stop spending, [and] more people lose jobs.”
The good news is that Luke believes the Fed isn’t blind to these risks and is going to cut rates sooner than many on Wall Street believe There’s one reason behind this…
The data.
Luke writes that both inflation and economic data are turning soft. ADVERTISEMENT  Wall Street icon who forecasted Black Monday and dot-com crash says a new economic event will hit the American economy like a tsunami. It doesn’t matter if you’re blue collar, white collar, working, or retired. He says, “I am literally afraid for my family’s future. I’m taking drastic steps to prepare for what I know will inevitably happen next.”
Click here to see his new prediction. If you read Luke, you know he’s been highlighting such reports for months now. But the most recent are June’s Empire State Manufacturing Survey, Citi’s Economic Surprise Index, and the jobs report. Luke tells us that they all say the same thing…
The Fed can – and should – cut interest rates very soon.
Here’s Luke with his specific timing for when this will happen, and what that means for stocks: Right now, the market is pricing in ~60% odds of the first rate-cut happening by September.
I predict that as we move through July and August, those odds will move toward 70%, 80%, then 90% as the data continues to soften and the Fed continues to tip its hat toward a September cut.
As those odds rise, stocks should soar. That means it’s time to prepare for this summer rally right now.
The next important data point comes one week from today Friday the 28th brings the June Personal Consumption Expenditures Price Index. This is the Fed’s favorite inflation gauge.
Although all eyes will be on how hot/cold the data come in, you have to wonder when the Fed will begin changing its focus – away from these last remnants of inflation, and toward the widening cracks in the labor market.
On this note, I’ll give Sahm the final word: Inflation has come down a lot. It’s not where you want it to be, but it is pointed in the right direction. Unemployment is pointed in the wrong direction.
Balancing these two out, you get closer and closer to the danger zone on the labor market and further away from it on the inflation side.
It’s pretty obvious what the Fed should do. Have a good evening, Jeff Remsburg | | |
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