As we head into the last quarter of the year, we’re gearing up for what could be a wild ride.
We’ve got two wars heating up with each passing day, an election year that feels like a fever dream, and world economies all aboard the crazy train.
Not to mention stocks rising like there’s no recession in sight, bond prices falling like there’s no geopolitical conflicts, and crypto dipping like the hype might be over.
What will happen before we ring in 2025? No one knows for sure, but zooming in on what’s going on keeps us on our toes and ready for action.
Let’s dive into the latest economic happenings, what’s going on in the stock market, and how heroes on the journey can make the most out of madness.
American Dreaming
With reality coming into clear view, we can’t help but wonder if the Fed got it all wrong. The narrative doesn’t align with the real world.
China is in full on panic mode, and what’s happening there should be a solid indicator of what’s happening worldwide. Chinese property prices are hitting bottom and consumer sentiment is also extremely low.
According to the Fed’s Manufacturing Employment data, September saw the lowest levels since April of 2009. Small businesses continue to struggle as high rates keep borrowing opportunities at a distance.
As far as the American Dream goes, mortgage applications are now below 2015 levels. Home prices are now 47% higher than they were in 2020. The median sale price is now a staggering five times the median U.S. household income.
Election promises from both sides are in full swing. However, unless one of the candidates has plans to pull massive inventory out of a hat (or cull the population), housing costs will likely stay high.
Manic Market
Despite major geopolitical conflict breaking out from all sides, markets are still on the rise.
As tensions escalated over the last two weeks, the S&P 500 posted its second highest close in history. Since last October, the index is up by a mind-blowing 40%.
The S&P has added $14 trillion of market cap in less than a year, which is over a trillion each month.
According to the spoon-fed narrative, inflation is heading back to 2% and the Fed will make massive cuts due to a weakening labor market. However, the 50 bps cuts were just about completely priced out after September’s blowout jobs report.
If you’re the betting type, the odds of another 50 bps rate cut in November fell from 50% to a measly 3%. Odds of another cut before we close out 2024 fell to 18%.
Quick question: why didn’t we see a dip in the markets if what’s supposed to make them bullish disappeared?
Something Better
As factors, Americans, and everyday heroes, we know that victory means conquering some ugly along the way.
In every good adventure story, the hero hurls towards an imminent death only to cheat it at the eleventh hour. From there, he’s reborn and empowered in ways we never saw coming.
When you commit to the journey, you commit to facing the things that terrify you. But we know that within those trials and tests are new lessons to learn that make us all the wiser.
As things continue to escalate on the brink of disaster, we also can’t help but wonder what kind of glory lies on the other side. While it’s helpful to look the doom and gloom in the face, staying optimistic about who you’ll be once the storm passes is key.
Let’s end with a classic Camus quote as we continue on the journey.
In the midst of winter, I found there was, within me, an invincible summer. And that makes me happy. For it says that no matter how hard the world pushes against me, within me, there’s something stronger – something better, pushing right back.
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