The stock market got off to a very rough start this year losing triple digits several days in a row without a big bounce back. Not a good sign.
China’s troubles seem to be spreading like a contagion into everything, just as the U.S. economy seems to be getting back on track.
The most recent and troubling news concerns the Baltic Dry index. This is the cost of international bulk shipping, a measure of global economic health and it has crashed.
According to Zero Hedge, international commerce has basically come to a complete halt. Meaning – no ships are moving anywhere. They are all docked. With the index at such lows, operating necessarily means operating at a loss right now. While largely ignored by the main stream media, will this lack of international trade be reflected at grocery stores soon?
Are we seeing the beginnings of things to come? Is the storm finally approaching?
UBS is warning of a 20 percent-30 percent crash and bear market coming this year or early next. This sounds bearish in the extreme after many in the financial sectors have just expressed elation at the December jobs report. However, it should be remembered that year over year, December was not that spectacular.
December 2014 saw 329,000 jobs added vs. 292,000 in 2015. Just because we expected 211,000 doesn’t mean we are out of any woods. In fact, UBS analysts say that instead of looking at this as the beginning of a real recovery, they see it more as the top end of a bull market, noting, "we are definitely more in the late stages of a bull market instead of being at the beginning of a new major breakout."
Read the rest of Scott’s article on the Lear Capital Blog
Scott Carter is chief executive officer of Lear Capital. He is an economic theorist, an investment specialist, and an authority on precious metals. Carter is also a popular talk-show guest with appearances on Bloomberg Businessweek, CBS Market Watch, Fox Business News, The National Post, Forbes, and Investors.com. For more of his reports, Go Here Now.
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