6 More Days to End the Year Positive

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GDP and Existing Home Sales Two important economic numbers were released today. At 8:30 third quarter GDP was reported at 2.0%. At 10:00 existing home sales for November were reported at 4.76 million, much lower than the expected 5.32 million. Existing home sales decreased by 10.5% from October to November. These two numbers are not signaling growth in the US housing market or the US economy. This is very troublesome as these numbers don’t support the decision of the Federal Reserve to raise interest rates. In the December meeting the Federal Reserve stated that they are confident that their 2% inflation target will be met. That they have confidence in the economy and believe that it will grow. In November the Federal Reserve stated that they were data dependent and they were concerned about the slowdown in china and economies around the world. The decision to raise interest rates in the December meeting does not make sense to me. Looking at the 2% third quarter GDP, there is not a lot of growth. With the amount of stimulus pumped into the economy over the last seven years GDP should be between 3.5% and 5% on a quarterly basis. This is very troubling going into 2016. Many people are calling for a recession in 2016. I am not in that camp just yet. I believe a recession could come in 2017 or late 2016 going into 2017. Existing home sales are showing a slowdown in the housing market. I do not understand how the Federal Reserve can justify the rate hike with this data. People are starting to think that the Federal Reserve acted too late. Normally when interest rates are raised it is early in the cycle of a recovery, not seven years later. I believe the Federal Reserve made a big mistake and the data we are seeing is not warranting another rate increase in the first and second quarter of 2016. Dow Jones Industrial Average Today the Dow Jones Industrial Average was up about 195 point at one point, before pulling in late in the day and closing up 165 points. Yesterday I stated that I was very bullish on the overall market and I believe it will trade higher into the end of the year. Year to date the Dow Jones Industrial Average is down about 2.3% and the S&P 500 is down about 1%. I do believe these losses will be made up, inching out a small gain into the end of the year. Going into 2016 I see significant volatility. Due to the worldwide economic slowdown I believe the Dow Jones Industrial Average could get down to the 15500-15800 range in the second or third quarter of 2016, retesting the lows of 2015. If I was a long term investor and I owned mutual funds, exchange traded funds, and/or individual stocks I would look to sell and be 100% in cash if the Dow Jones Industrial Average gets into the 17800-18400 range between now and the end of the year or even into early January. I would then wait for good opportunities to reenter in 2016. Gold Today gold was down 8-9 dollars. I am looking for gold to pull back into the 1048-1060 range where I think gold should hold. With the numbers released today I think gold will have a good bid underneath the market due to the realization that the Federal Reserve will not raise interest rates in the first quarter of 2016. Crude Oil I am now looking at the February contract for crude oil. Crude oil caught a bid today, up 40-50 cents towards the end of the day. I am more of a buyer than a seller in crude oil. I think crude oil has the potential to get up to the 38.50-40 dollar a barrel range. If crude oil pulls into the 33.50-35.50 range I would look to buy. I see a significantly oversold condition on the weekly charts and I am seeing the daily chart starting to turn up.
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Star of Discovery Channel’s “Undercover Billionaire,” Grant Cardone owns and operates seven privately held companies and a private equity real estate firm, Cardone Capital, with a multifamily portfolio of assets under management valued at over $4 billion. He is the Top Crowdfunder in the world, raising over $900 million in equity via social media. Known internationally as the leading expert on sales, marketing, and scaling businesses, Cardone is a New York Times bestselling author of 11 business books, including “The 10X Rule,” which led to Cardone establishing the 10X Global Movement and the 10X Growth Conference, now the largest business and entrepreneur conference in the world. The online business and sales educational platform he created, Cardone University, serves over 411,000 individuals and Forbes 100 corporate clients throughout the world. Voted the top Marketing Influencer to watch by Forbes, Cardone uses his massive 15 million plus following to give back via his Grant Cardone Foundation, a non-profit organization dedicated to mentoring underserved, at-risk adolescents in financial literacy, especially those without father figures.