“From the rising of the sun even to its setting, My Name will be great among the Gentiles,” says Yahweh Sabaoth.
(Malachi 1: 11)
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Our Economic Future is in Our Hands
The stock market rebound that began at the end of the Great Recession in June 2009 plodded along at a snail’s pace until Donald Trump won the 2016 presidential election. His election caused the U.S. economy and the stock market to soar, because he promised to unshackle businesses across the nation.
President Trump kept his word, and his plan worked. The economy and the stock market have been growing like gangbusters since November 2016 with normal corrections along the way.
Stock Market Corrections
We’ve had 2 stock market corrections in 2018. The first one was in February. This week’s correction is the other one.
Stock market corrections are like breathing. You breathe in. You breathe out.
If you breathed in all the time, your lungs would explode. If you breathed out all the time, your lungs would collapse.
The same is true for the stock market. If it rose constantly, PE (price to earnings) ratios would rise to unsupportable levels. A bubble would form, and eventually it would explode.
Bubbles
The Great Recession was brought on primarily by a real estate bubble. Officially, it began in December 2007 and exploded in late-2008. But serious signs that a real estate bubble was forming were evident as early as 2006.
Market bubbles are not good. Market corrections keep bubbles from forming. They let the air out, so to speak.
Bubbles are bad. Corrections are good.
We are not Due for Another Recession
Since the end of World War II in 1945, the average length of a business cycle has been about 5½ years.
A business cycle is the time it takes to go from one economic peak through a recession and back to another economic peak.
If you follow the stock market, you’ve heard economists and so-called “business experts” say, “We are due for another recession.”
That’s baloney. We are not due for anything.
As I said, the Great Recession ended in June 2009. That means we’ve been in a growth market for almost 9½ years. That’s about 4 years longer than the typical business cycle. That’s why so-called “experts” are saying that we are due for another recession.
They are talking about averages, not business fundamentals. From a fundamental perspective, business looks good. There is nothing on the immediate horizon that suggests a recession is upon us.
This Week’s Stock Market Correction
This week’s stock market correction should be viewed as breathing out before the 2018 midterm elections.
Today, businesses will begin reporting their third quarter performance. Their results should impress. That means between now and the end of the year, the stock market should regain most of what it lost and maybe more than it lost.
Everything depends on the midterm elections.
The Midterm Elections
As Election Day approaches, the more likely it appears that Republicans will keep control in both houses of Congress, the more excited investors will become about what the future holds. Their excitement will translate into business activity and stock market gains.
The president calls Democrats “obstructionists”. That’s exactly what they are. They have tried to block him at every turn. If the much-anticipated blue wave that Democrats are hoping for doesn’t materialize and a red wave develops instead, the stock market will soar. So will the U.S. economy.
President Trump has promised to rebuild our nation’s crumbling infrastructure. He has a habit of keeping his word.
Rebuilding our infrastructure will cost a lot of money and generate a lot of business activity. That will cause the U.S. economy and the stock market to continue growing. It will also create new jobs and better paying jobs. Everyone will benefit.
The G-20 Summit
Let’s assume that the American people are smart enough to elect Republicans who will support the president on November 6th. On November 30th, there will be a G-20 summit in Buenos Aires, Argentina. President Trump and Chinese President Xi Jinping have agreed to meet during the summit to discuss trade friction between the two countries.
If the American people support the president in November, President Xi will be motivated to negotiate a trade deal with President Trump. If that happens, the stock market and the U.S. economy will take off like rockets.
If we don’t support our president in November, President Xi will assume that he can safely resist pressure to behave like a responsible trading partner and refuse to negotiate. That will stifle the stock market and the U.S. economy.
It’s as simple as that.
We will Determine our Economic Future
Our economic future is in our hands. If we support the president, all of us will come out winners. If we don’t support him, all of us will suffer.
President Trump is Yahweh’s man for a time like this. We have benefited because we elected him, and we will continue to benefit if we support him.
We are in control of our own destiny.
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“The glory which You have given Me I have given to them, that they may be one, just as We are one; I in them and You in Me, that they may be perfected in unity, so that the world may know that You sent Me, and loved them, even as You have loved Me. Father, I desire that they also, whom You have given Me, be with Me where I am, so that they may see My glory which You have given Me, for You loved Me before the foundation of the world.” (John 17: 22-24)
