Top trends forecaster Gerald Celente predicted a 10% correction in the stock market for 2018. It already happened. What are his updated predictions for the rest of the year? Celente says, “What brought the markets down was the fear of interest rates going up. Now, as you mentioned, we had forecast a 10% correction. Here’s our forecast now. We believe the Trump rally is near its peak. It may go up more, and here is why it will. Trump is allowing companies to bring back money from overseas. All that dough they have stashed over there that they haven’t been paying taxes on, they’re going to bring it back and get a great tax break. . . . George Bush did that back in 2003 and 2004. Do you know where the money went? 96% went into stock buybacks, not capital improvements. Again, Trump gave them a 21% tax rate from the 35% rate, and that money, we believe, won’t go into capital improvements because when you look at S&P 500 earnings, they are doing really great. They are expected to have a 19% increase this year.”
So, is Celente expecting another 10% correction in the stock market? Celente says, “Possible, yes. The possible why is a black swan event and, in particular, war. Do you see what is going on in the Middle East? . . . One of my sayings, and it goes for any country anytime and in any place, when all else fails, they take you to war. They are ratcheting up war in the Middle East with Saudi Arabia and other countries against Iran. . . . If there is a war against Iran . . . If there is war in the Middle East, you will see oil prices spike to above $100 per barrel. If that happens–bam, not only the U.S. equity markets, but you will see the global equity markets go into bear territory. . . .The markets are overvalued, the price/earnings (PE) ratios are in the 26 range, and 14 is usually the average. They are near historic highs by many measurements.”
Celente also points out another big headwind for the markets. Celente says, “Rising interest rates. Look at the numbers that came out last week on housing. Boom! Mortgage applications down, and purchases down on all different levels. Interest rates are going up.”
Celente likes gold but predicts nothing is going to happen until “it hits $1,450 per ounce and stabilizes around that price.” Celente also predicts, “The United States wants a weaker dollar so we can increase our exports. . . I am betting on a weaker dollar.”
Greg is the producer and creator of USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows.