US economy will weaken in 2019: Dennis Gartman


SLIGHTLY OFF THE HIGHS OF THE SESSION, UP 6% FOR TESLA. I DON’T KNOW IF DENNIS GARTMAN HAS A TESLA BUT WE WILL BRING HIM IN. DENNIS, WE SAW THIS. THE BULLS MAY BE BREAKING OUT THE CHAMPAGNE ON WALL STREET BUT THERE’S THIS SURVEY, I DON’T KNOW IF YOU SAW THIS, IT MAKES ME WONDER, THERE ARE A RECORD NUMBER OF FUND MANAGERS MAKING THE PREDICTION THAT THE GLOBAL ECONOMY IS ON ITS LAST LEGS. COMES OUT OF BANK OF AMERICA MERRILL LYNCH, MONTHLY SURVEY OF INVESTMENT MANAGERS, FOLKS WHO RUN ABOUT $684 BILLION WORTH OF ASSETS. MORE THAN A THIRD OF THEM ARE EXPECTING A SLOWDOWN NEXT YEAR. I BELIEVE THAT’S THE WORST OUTLOOK SINCE THE FINANCIAL CRISIS IN 2008. COME IN RIGHT NOW WITH YOUR THOUGHT, PLEASE. IT’S TOO MUCH TO SAY FOR ME, TOO BROAD TO SAY WE ARE IN THE LATER STAGES OF THE GROWTH PSYC STAGES OF THE GROWTH CYYC STAGES OF THE GROWTH CYCLE. CUT TO THE CHASE. WHERE ARE WE, BULL, BEAR, ON THE PRECIPICE OF A BEAR, REALLY NARROW IT DOWN FOR US.>>WE ARE IN THE VERY LATER STAGES OF AN ECONOMIC UPTURN, THERE’S NO QUESTION ABOUT IT. THE FED IS GOING TO TIGHTEN PROBABLY TOO MUCH, TAKE THE YIELD CURVE TO AN INVERSION. WE HEAR THAT TALK ALL THE TIME. THAT’S WHAT THE FED INTENDS TO DO OR WILL END UP DOING. I THINK WE WILL BE IN A SLOWDOWN OF SOME SORT BY SOME TIME LATE NEXT YEAR, MAYBE A LITTLE BIT EARLIER THAN THAT. UNTIL THEN, THE ECONOMY IS STILL VERY STRONG FOR NOW BUT IT SHALL WEAKEN NEXT YEAR AND STOCK MARKETS GO DOWN BEFORE ECONOMIES TURN DOWN. STOCK MARKETS GO UP BEFORE ECONOMIES TURN UP. I THINK WE HAVE SEEN THE HIGHS IN STOCKS IN GLOBAL TERMS. WE MAY BE SEEING THE HIGHS IN STOCKS HERE IN THE UNITED STATES AND I THINK IT’S WISE IF YOU ARE AGGRESSIVELY LONG TO BE LESS LONG. I THINK IF YOU ARE NOT LONG, I THINK IT’S TIME TO GO TO THE SIDELINES. I THINK WE HAVE STARTED A BEAR MARKET GLOBALLY AND THE UNITED STATES HAS BEEN ABLE TO OFFSET THAT GLOBAL BEAR MARKET BY MOVING HIGHER BUT I THINK THAT’S OVER. LIZ: OKAY. SO I’M GOING TO PUSH YOU HERE. AS YOU SAID, THE TWO BIFURCATE. THE ECONOMY, STOCK MARKET, TWO DIFFERENT THINGS. THE S&P 500, 250 OF THE NAMES ARE NOW DOWN AS OF YESTERDAY 20%. ANOTHER HUNDRED OR SO ARE DOWN SOMETHING LIKE 40%. DOES THAT MEAN WE ARE IN A BEAR MARKET AND NOBODY REALLY REALIZES IT YET?>>I THINK WE ARE IN A BEAR MARKET, NOBODY REALLY REALIZES IT YET. LIZ: HOW CAN WE HAVE 484 POINTS IN GAINS FOR THE DOW RIGHT NOW AND BE IN A BEAR MARKET?>>YOU LOST 2,000 DOW POINTS LAST WEEK. SO A BOUNCE OF 480 POINTS IS REALLY NOT THAT TERRIBLY CONSEQUENTIAL. WHAT’S REALLY IMPORTANT, WHAT I WILL PAY ATTENTION TO THIS AFTERNOON, IS WHAT’S THE VOLUME LIKE ON THE UPSIDE. IF THE VOLUME — LIZ: IT’S 9% BELOW THE ONE-MONTH AVERAGE. LAST WEEK IT WAS 30% TO 36% ABOVE THE ONE-MONTH AVERAGE.>>THAT TELLS YOU ALL YOU REALLY NEED TO KNOW. VOLUME SHOULD FOLLOW THE TREND AND IF VOLUME IS DOWN ON AN UP DAY LIKE THIS, WHEN VOLUME EXPANDED DRAMATICALLY LAST WEEK ON THE DOWNSIDE, THAT HAS TO TELL YOU BE VERY CAREFUL. BE LESS INVOLVED, USE THE STRENGTH TO BECOME LESS INVOLVED, USE THE STRENGTH TO SELL INTO. I THINK THAT’S THE WISE CHOICE OR WISE COURSE OF ACTION FOR THE NEXT SEVERAL WEEKS AND CERTAINLY THE NEXT SEVERAL DAYS.>>CHARLIE GASPARINO HERE.>>HEY, CHARLIE.>>HOW ARE YOU? SAY HELLO TO YOUR DAUGHTER FOR ME. GOOD KID.>>I SHALL.>>THE BULL CASE FOR THE MARKET IS THAT THE TAX CUTS, MASSIVE CORPORATE TAX CUTS, AREN’T FULLY FACTORED INTO THE ECONOMY AT LEAST, MAYBE THE MARKET, BUT THE ECONOMY, THAT THE GROWTH PROSPECT OF COMPANIES WILL EXPAND EVEN GREATER IN THE NEXT YEAR BECAUSE OF THOSE TAX CUTS, THE SUPPLY SIDE IMPACT HASN’T YET KICKED IN. HOW DO YOU ADDRESS THAT? BECAUSE SUPPLY SIDE IMPACT USUALLY TAKES SIX MONTHS, A YEAR TO FULLY FACTOR INTO THE ECONOMY.>>CHARLIE, DON’T STOCK MARKETS ANTICIPATE AND DISCOUNT THAT SORT OF ACTIVITY. EVERYBODY KNOWS THE TAX CUTS HAVE GONE INTO EFFECT. THERE’S NO NEW NEWS TO THAT EFFECT. WE MAY GET NEW TAX CUTS WHICH I DOUBT. WE WOULD NEED THAT TO KEEP THESE THINGS GOING HIGHER. TO ME WHAT’S MOST IMPORTANT OF ALL IS THE FUEL FOR THE STOCK MARKET. THE ADJUSTED MONETARY BASE HAS BEEN DECLINING NOW SINCE 2015. THE FED HAD GONE OUT OF ITS WAY TO SUPPLY FUEL TO THE SYSTEM. NOW IT’S TAKING THAT FUEL AWAY.>>YOU’RE SAYING THE REVERSE OF QE, FORGET ABOUT FED FUNDS RATE.>>EXACTLY.>>ON THE LONG END, WHICH COULD REALLY LEAD TO MUCH HIGHER INTEREST RATES.>>EXACTLY. THAT’S WHAT I’M VERY CONCERNED ABOUT. WE NEED TO ROLL OFF THAT HUGE INCREASE IN THE ADJUSTED BASE. IT WENT FROM 800 BILLION — GO AHEAD. I’M SORRY. LIZ: CAN WE JUST END ON HOW DO YOU INVEST? SURELY THERE’S ALWAYS A TRADE, IS THERE NOT? SO IS YOUR PERSPECTIVE, HOW AND WHERE DO YOU PUT THE MONEY?>>I THINK YOU PUT IT IN — THERE ARE A LOT OF BOND FUNDS THAT ARE LISTED THAT HAVE GREAT LIQUIDITY THAT PAY 6%, 7%, 8%. THEY PAY DIVIDENDS ON A MONTHLY BASIS. THAT’S THE CLOSEST THING TO CASH, THE BEST PLACE FOR PEOPLE TO GO TO. I THINK THAT’S WHERE YOU SHOULD HIDE THE NEXT SEVERAL MONTHS. LIZ: JUST GOT NEWS FROM CHARLIE BRADY. I WILL WHISPER THIS. THAT VOLUME I SAID WAS 9% BELOW THE ONE-MONTH AVERAGE IN THIS LAST HALF HOUR, IT IS NOW 15% BELOW THE ONE-MONTH AVERAGE.>>NOT A GOOD TIME.>>THE TRANSLATION IS NO CONVICTION ON THE UPSIDE, YOU’RE SAYING.>>THAT’S EXACTLY, CHARLIE, EXACTLY RIGHT. THERE’S NO CONVICTION ON THE UPSIDE. THERE WAS CONVICTION LAST WEEK ON THE DOWN SIDE. YES, INDEED. THE DOW IS UP 500 POINTS BUT IT WAS DOWN 2,000 POINTS LAST WEEK

28 thoughts on “US economy will weaken in 2019: Dennis Gartman

  1. Good thing that trade war is wrapping up. Economists have been saying this for a few months, and this was one of the reasons starting a trade war with all your allies and China at the same was a bad idea. You all went full steam ahead to own the libs, so let's see how this plays out.

  2. These Terrible Tariffs are going to do in stocks and the dollar. This was recorded in October fast forward to late December last five weeks out the work week three of out of five days the dow was down 100-500 points. These tariffs are going to take down the economy it's very evident you don't have to be a stock expert to see that

  3. Russia has been swapping US debt for physical gold, so they have further gained stability in their ability to implant liquidity, if need be to counter any severe global encumbrances. These practices and the majestic potential of full autonomy and self sufficiency, provides the Petri-dish, whose culture, if successful, may become the model for which the rest of the world can follow. A world, very much the opposite, with predatory financial instigation and a glad bag of idiosyncrasies that favour a derelict few, are thirsting for real change. As we wake to our spiritual heritage, the hylozoism within all that compels respect, we will begin to respect each other without benefit of doing so. These potentials are hard to qualify into your analysis and study and yet they exist in gold doubloons vaulted somewhere deep within Russia and in the heart and soul of discussions just as these. Great show, (from the author of Really Small Town, a song about the worlds double standards) BB

  4. I think people don't really understand what's going. Yeah there are jobs yeah the economy is moving but the prices for the cost of living are inflating at alarming records.

  5. The EU is already ganging up whit China against USA in Mexico.
    The only thing EU hates more than Russia is Usa.And Usa supports those idiots and eurocrats

  6. The U.S. economy is in the middle of a new land/property market cycle, a cycle that averages 18-21 years depending on the extent to which monetary policy provides a high or low level of credit for speculation in land and property. A strong indicator that the markets are heavily speculation-driven is the extent to which investors are involved in acquiring property with the intent of rapid turnover (i.e., flipping for quick gains).

    By lowering interest rates to rock bottom after 2008, the Federal Reserve prevented the nation's land markets from clearing the speculation-derived gains realized in the last cycle. Instead, property prices were propped up. Low mortgage interest rates were capitalized by market forces into even higher land and property prices than were reached in 2007. The result is that millions of households (and many businesses) are burdened with historically high levels of mortgage debt. Servicing this debt at low rates of interest is not the issue. Any interruption in income, employment or business revenue will result in huge numbers of mortgage loan defaults, with the incidence of loss per loan higher than was experienced with the collapse of the sub-prime mortgage market in 2008.

    I teach a semester-long course on "The State of the U.S. Economy and Society." The Powerpoint modules used in this course are available on SCI's website for anyone who has the time and interest to look at the situation in depth. The course modules can be accessed here:

    http://www.cooperative-individualism.org/state-of-the-u-s-economy-and-society.htm

    Edward J. Dodson, M.L.A., Director
    School of Cooperative Individualism
    www.cooperative-individualism.org

  7. Just like all great empires fall. Like gravity America going down and it gonna hit hard especially electong Donald Trump. Even if he decided to run a 3rd term worse scenario that is. He it wont last his 73 and eats McDonald's his a stroke or heart attack away. He probably eats at McDonald's because it has his name in it like the narcissist he is.

Leave a Reply

Your email address will not be published. Required fields are marked *