El Momento Que Estábamos Esperando Ha Llegado.

Summary

The video script discusses the conflicting economic indicators in the United States, with the ISM index of new manufacturing orders suggesting a significant economic slowdown, while the S&P 500 index hits new highs. It explores the possibility of a recession, comparing current trends with past economic downturns, and discusses the potential impact on the stock market. The script also outlines strategies for clients in the face of these uncertainties, emphasizing the importance of staying informed and prepared.

Takeaways

• 📉 The ISM Index of new manufacturing orders has plummeted to its lowest level in a year, indicating a significant deceleration in U.S. economic activity.
• 🔄 The situation in 2023 has taken a 180-degree turn from the beginning of the year, which seemed to be the start of a recovery.
• 🤔 50% of Americans currently believe the U.S. is already in a recession, despite some media outlets labeling this belief as misinformation.
• 📈 The S&P 500 index has soared to new historical highs over the past two years, contrasting with the recessionary signals from the ISM index.
• 💡 The ISM index often provides an early warning signal of economic contraction before the GDP weakens, as seen before the recessions in 2001 and 2008.
• 📊 The correlation between interest rates and the manufacturing orders index suggests the U.S. economy may continue to weaken until mid-2025.
• 😕 Despite the ISM index showing signs of a potential recession, the U.S. GDP growth remains around 3%, which is typically seen during economic expansions.
• 📉 In the worst-case scenario, the U.S. economy could be heading towards a severe deterioration and a deep recession within the next year.
• 💼 Small businesses have been hiring less and even laying off staff, a typical sign of periods leading to economic recessions.
• 📊 The stock market has not yet shown signs of a severe downturn despite the low ISM index levels, as was the case in 1995 when the S&P 500 rose during a similar period.
• 🚀 The strategy has been to capitalize on the strong bull market towards the end of 2023 and the beginning of 2024, maintaining exposure and making profitable trades for clients.

Q & A

What economic indicator has recently signaled a significant deceleration in the economic activity of the United States?

The economic indicator that has recently signaled a significant deceleration in the economic activity of the United States is the ISM index of new manufacturing orders.

What does the ISM index of new manufacturing orders indicate about the current state of the U.S. economy?

The ISM index of new manufacturing orders indicates a potential downturn or recession in the U.S. economy, as it has dropped to its lowest level in the past year.

How do the recent trends in the ISM index compare to past economic recessions like 2008 and 2001?

The recent trends in the ISM index are similar to those observed during past economic recessions like 2008 and 2001, suggesting a possible upcoming recession if the downward momentum continues.

What is the general public's perception of the current U.S. economy according to the script?

According to the script, 50% of Americans believe that the U.S. is currently in a recession, despite some media outlets labeling this belief as misinformation.

How does the S&P 500 index performance contrast with the economic indicators suggesting a possible recession?

In contrast to the economic indicators suggesting a possible recession, the S&P 500 index has surged, reaching new historical highs over the past two years.

What is the role of the ISM index in predicting the behavior of the U.S. economy?

The ISM index often provides an early warning signal of economic contraction, preceding the decline in GDP, and can also indicate the beginning of economic recoveries.

What is the current GDP growth rate, and how does it compare to typical economic expansions and recessions?

The current GDP growth rate is around 3%, which is considered a healthy growth rate during normal economic expansions and contrasts with the decline in GDP during recessions.

How do interest rates and the ISM index of new manufacturing orders correlate, and what does this mean for the U.S. economy?

There is a strong correlation between interest rates and the ISM index of new manufacturing orders, with interest rates often predicting the behavior of the economy about a year and a half in advance.

What is the best-case scenario for the U.S. economy according to the script?

The best-case scenario is that the U.S. economy continues to weaken at current levels until June 2025, with the ISM index of new orders remaining stable and potentially recovering by then.

What is the worst-case scenario for the U.S. economy as described in the script?

The worst-case scenario is a severe deterioration of the U.S. economy over the next year, leading to a deep recession.

How has the stock market performed historically when the ISM index of new manufacturing orders was at similar levels to today's, and what does this suggest for the future?

Historically, when the ISM index was at similar levels, such as in 1995, the stock market (S&P 500) rose during the same period, suggesting that a similar upturn could be expected in the best-case scenario.

What is the current strategy for investors in light of the strong bull market and the potential for a recession?

The current strategy is to take advantage of the strong bull market towards the end of 2023 and the beginning of 2024, maintaining exposure to the market and making as many profitable trades as possible for clients, as long as a recession does not occur.