ECONOMIC UPDATE – MARKET OVERVIEW

All the mainstream media, as illustrated in this week’s Trends Journal cover, are whores. Nothing more than Presstitutes who get paid to put out by their corporate pimps and government whore masters.

When the COVID War began in China in January 2020—their Lunar New Year, “The Year of the Rat”—it was quickly transported overseas. Beginning with Italy, power-hungry politicians lacking a scintilla of hard data and scientific proof locked down entire nations to fight the COVID War.

While the masses marched off to war, as they have a long history of doing, and followed the orders of their political freaks and obeyed the arrogant bureaucrats called “health ministers” etc., we warned in great detail that the draconian mandates imposed upon the public would wrought socioeconomic implications of a magnitude unprecedented in human history.

Although we had sent out several hundred Trend Alerts® to the mainstream media warning them that the lives and livelihoods of billions would be destroyed, they were totally ignored.

Among them was our trend forecast of an Office Building Bust. Ignored then, it is “big” news now:

Commercial real estate has a ‘shock coming’ as return-to-office plans fall short, CEO says

• “There’s this assumption that people like commuting into a central business district. They don’t, it’s a complete waste of time and money and they don’t want to do it,” Mark Dixon, CEO of flexible office company IWG, said.

• The Covid-19 pandemic forced millions of people to work from home for the first time, and they don’t necessarily want to go back, he added 

There’s a “shock” coming for the commercial real estate industry, but the opportunities ahead are huge, according to Mark Dixon, CEO of flexible office company IWG.

Technology enabled a “fundamental seismic shift” in commercial real estate as the Covid-19 pandemic forced millions of people to work from home for the first time, Dixon said—and workers don’t necessarily want things to go back to how they were before. (CNBC, 7 Mar 2023.)

Blow me away. Would have never known this would happen… been only warning about this in The Trends Journal week after week, month after month, year after year. Here are just a few examples:

● “Commercial Real Estate in a Tailspin” (20 Oct 2020)

● “Deloitte Abandons More London Office Space” (26 Apr 2022)

● “GM Softens Back-to-the-Office Requirement After Worker Backlash” (4 Oct 2022)

● “Business Office Bust Begins to Bite” (20 Dec 2022)

● “New York City’s Workforce Sharply Shrinking” (24 Jan 2023)

● “Office Occupancy Half of What It Used to Be” (7 Feb 2023)

TREND FORECAST: As we forecast in Office Building Bust, a Top Trend for 2023 (3 Jan 2023) this next phase of the office property crisis is accelerating as landlords face stiffer competition to get and keep tenants, wrangle with local governments to try to minimize their tax assessments, and see their margins shrink—many to the point of disappearing. And for many with adjustable-rate mortgages, the higher interest rates rise, the more they have to pay on their loans.  

To survive, many landlords will let go of older buildings needing maintenance or repairs, either offering them at fire-sale prices or handing the keys back to lenders… which, as we have reported, they are now doing.  

As property values are reassessed downward, cities will confront hard decisions about which workers and services to cut. And as for converting offices into residential apartments and/or condominiums, as we have noted in previous issues of The Trends Journal, thousands of office buildings, especially older ones, across the U.S., are not eligible for that kind of salvation for reasons we explained in “Plan to Turn New York’s Vacant Hotels to Housing Not Working” (5 Apr 2022) and “Wall Street, Dead Street. Office Buildings Going Condo” (28 Jun 2022).  

TRENDPOST: Full of bullshit before, and still on the same BS page, today Fed Head Powell dismissed our Office Building Bust trend by ignoring the fact that office buildings constructed over the past 50 years are not apartment adaptable. He admitted that there are “pockets of concern” in the commercial debt market and moronically stated that “The occupancy of office space in many major cities is just remarkably low, and you wonder how that can be. Over time, some of that is going to be made into condominiums and things like that.” 

Wonder how it could be? It’s no “wonder”… hybrid work is the way of the future. Again, we note this since the implications of the Office Building Bust (3 Jan 2023) are unprecedented and it will be a shock that will be felt from sea to shining sea.

As trend forecasters we analyze the current events forming future trends and provide trends analysis and trend forecasts that are not part of the mainstream narrative.

Again, we had warned that when politicians locked down much of the world, children were forced to stay home and when they did go back to school—which many did not as we have detailed—they would suffer severe mental disorders. Besides the drug overdose and suicide rates spiking, Gerald Celente warned that crime rates would soar, “When people lose everything and have nothing left to lose, they lose it.”

Mask Madness

And lose it they have. How about that mayoral election in Chicago last week where the incumbent lost because crime rates are out of control?

How about New York City where the egotistic mayor Eric Adams—a champion of the COVID War who forced public servants to get the COVID Jab and bragged about his “COVID-19 Booster Campaign” last September—who is now telling people not to wear masks when they go into stores.

Why?

Because of rising crime and with a mask on you can’t see who the criminal is.

Yesterday Adams declared that “We are putting out a clear call to all of our shops, do not allow people to enter the store without taking off their face mask.” He went on to say, “Let’s be clear, some of these characters going into stores that are wearing their mask, they’re not doing it because they’re afraid of the pandemic, they’re doing it because they’re afraid of the police. We need to stop allowing them to exploit the safety of the pandemic by wearing masks, committing crimes.”

Total bullshit! “Characters?” How about crooks and criminals?

This is a city that imposed some of the most draconian COVID War mandates and forced people to wear the useless masks. And it was not a “pandemic.” Again, how many people do you personally know that died from the coronavirus? And if you do know someone, how old were they and how many preexisting comorbidities were they suffering from.

TRENDPOST: We have continually detailed the ineffectiveness of wearing masks. Here are just of a few of the past Trends Journalarticles: 

● “Blowing Up in Their Faces. Masks Don’t Work in Preventing COVID Spread” (14 Feb 2023)

● “Nevada: We Need Your Money. Take Off Your (Worthless) Masks” (15 Feb 2022)

● “Mask on a Plane = Mass Stupidity” (5 Oct 2021)

● “Wear Masks, Breathe Toxic Particles” (13 April 2021)

● “Danish Study: Masks Offer Very Limited Protection” (5 Jan 2021)

● “Masks Offer Little, If Any Protection” (20 Oct 2020)

● “European Health Officials Agree: Masks Don’t Work” (29 Sept 2020)

But again, while the socioeconomic, mental, physical and geopolitical consequences of the COVID War are incalculable, from the Office Building Bust to crime, etc., you can, but they—the politicians and mainstream media who launched and promoted the COVID War—won’t blame it on their draconian lockdown mandates.

Need another example?

PORTLAND Ore. (KPTV) – Walmart’s departure from Portland shines light on rampant property crime (6 March 2023)

Got it? Not a word in their article that the spiking crime rate is a result of the COVID War lockdowns.

And the crime rates and economic decline will get worse.

Why?

Because in the fight to win the COVID War, the governments that destroyed lives and businesses artificially propped economies with countless trillions of free money and their Bankster buddies assisted them with ultra-low interest rates.

The facts are clear and undeniable.

For example, as the economy was locked down and going to shit, the housing boom drove up prices some 40 percent in the U.S. and across other developed nations as people were borrowing money at near record-low mortgage rates.

On the equity market front, the low interest rates created an artificial surge that spiked up the stock market which should have crashed as a result of the lockdowns and millions of businesses going out of business. Cashing in on the cheap money binge, the “Bigs” got bigger as their merger and acquisition activity hit an all-time high in 2021.

Game Over 

And of course, there were the outright lies, or was it sheer stupidity, by the Central Bankster Bandits who bullshitted for nearly two years that as a result of the cheap money spree there was no real inflation… it was only “temporary” and then “transitory.”

And now, with inflation entrenched across much of the economic spectrum and it can no longer be denied, as we had forecast, the higher the central banks raise interest rates the deeper the economy and equity markets will decline.

Today, the U.S. Fed Head Jerome Powell told the clowns on Capitol Hill that “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.” He warned that “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”

However, while the economy may appear to be strong, we disagree. It was artificially propped up and as we continue to note, the higher interest rates rise, the deeper equities and economies will fall… and fall they are. Indeed, with the cheap money drying up, the U.S. manufacturing sector slid down for the sixth consecutive month through February according to Federal Reserve data.

Also on a down note, the U.S. Commerce Department reported that its measure of civilian capital equipment order fell 3.4 percent in January… after hitting a high in November 2021 when the nation was awash in cheap money and low interest rates.

It is all about inflation which, as we reported, jumped higher than expected in January. Therefore, with inflation still strong the bet worrying The Street is that Powell’s hawkish statement today signals that the Fed will raise interest rates 50 basis points when they meet in two weeks.

TREND FORECAST: We have warned that the stock market climate is ripe for March Madness 2023. Equities will not be able to take a 50 basis points hike. 

Go back one year ago. 

While the Dow is down a bit lower than it was this time last year, the broader stock market index, the S&P 500, is 6 percent lower than it was last March and the Nasdaq is more than 12 percent lower than it was in March 2022.

With interest rates rising, so too will the cost of servicing debt in both the government and private sectors. Therefore defaults will skyrocket especially in the office building and real estate markets. On the real estate front, on a seasonally adjusted basis, mortgage applications for the week ending 24 February hit their lowest level in 28 years according to the Mortgage Bankers Association.

And as interest rates go higher it will push up the U.S. dollar and push down other currencies especially those in emerging markets that are saddled with dollar debt. Thus, the higher the dollar rises, the more it will cost them to service their debt… which many will not be able to do. 

As a result demonstrations will escalate in emerging market countries as the masses take to the streets to protest lack of basic living standards, government corruption, crime and violence. 

LAST WEEK: STRONG SERVICE SECTOR LIFTS EQUITY MARKETS

All three major U.S. stock indexes ended last week higher after new data showed the economy’s services sector performing at its strongest since last summer.

The positive news eclipsed markets’ worries over higher interest rates and sticky inflation that sent share prices lower earlier in the week.

The S&P Global’s U.S. Services Purchasing Managers Index (PMI) jumped from 46.8 in January to 50.6 in February, its highest reading since June.

Ratings above 50 indicate growth; numbers below 50 signal contraction in business activity.

Service sectors in China and Europe also booked expansions last month.

The Institute for Supply Management’s index of service activity ticked down to 55.1 in February after recording 55.2 in January. However, last month’s mark still exceeded the consensus forecast of 54.3 by economists The Wall Street Journal surveyed.

The Dow Jones Industrial Average ended a four-week losing streak, gaining 1.5 percent for the week. The NASDAQ also added 1.5 percent. The Standard & Poor’s 500 index took on another 1.4 percent.

The new measures of economic strength are likely to spur the U.S. Federal Reserve to continue raising interest rates, analysts told the WSJ.

“We’re trying to draw a signal from each data release about whether we’re close to the peak in inflation and interest rates,” Invesco fund manager Sebastian Mackay said to the WSJ.

On Thursday, the yield on the benchmark 10-year treasury note closed above 4 percent for the first time since November, then slipped to end the week at 3.962 percent.

Spot gold rose 2.6 percent to $1,856.58 at 5 p.m. U.S. EST on 4 March.

Brent crude oil was up 3.4 percent on the week to $85.83 at 5 p.m. U.S. EST on 4 March. West Texas Intermediate, which sets U.S. oil prices, gained 4.6 percent to $79.78.

Bitcoin shed 5.0 percent to $22,334.70 at 5 p.m. U.S. EST on 4 March.

In London, the FTSE closed up 3 points, essentially flat for the week. The trans-European Stoxx index moved up 1.3 percent.

In Asia, Japan’s Nikkei grew by 2.2 percent. The South Korean KOSPI ticked down less than 0.1 percent.

The Hang Seng index in Hong Kong was up 3.7 percent. The Chinese mainland’s CSI Composite and SSE Composite each added 2.2 percent.

YESTERDAY: DOW UP SLIGHTLY BEFORE POWELL ADDRESSES CONGRESS

The Dow Jones Industrial Average gained 40.47 points, or 0.12 percent, to close the day at 33,431.44. The S&P 500 was also up 0.07 percent to close at 4,048.42. The tech-heavy Nasdaq Composite was down 0.11 percent to close at 11,675.74.

Stock traders were tentative before Federal Reserve Chair Jerome Powell’s biannual monetary policy testimony in front of Congress later on Tuesday and Wednesday. The Street is also waiting to learn about the monthly jobs report due out on Friday, which is expected to show a slower pace from January’s 517,000 new jobs. Economists believe the new figure will come in at about 215,000 new jobs.

The yield on the 10-year U.S. Treasury was in the 4 percent range on Monday, and settled at 3.98 percent. The dollar index closed down slightly to $104.34.

TRENDPOST: Once again, the gamblers on The Street will be listening closely to Powell, the head Central Bankster, to get a sense of how the Federal Reserve will approach future rate hikes. Economists believe that the bank will increase the rates a few more times in the near-term, and then stop to get a sense of the economy. 

Although Powell’s comments will drive the market, Friday’s jobs number will signal if inflation is, indeed, slowing. Again, as we have continually forecast: The higher and faster interest rates rise the deeper the economy and equities will fall, period.

Elsewhere, London’s FTSE was down 17.32, or 0.22 percent, and the STOXX 600 was about even, down 0.02 percent, to 464.18. In Asia, Japan’s Nikkei was up 1.11 percent to close at 28,237.78, South Korea’s Kospi was up 1.2 percent, to close at 2,462.62. China’s Shanghai Composite was off 0.19 percent to 3,322.03 and the Shenzhen Component was down 0.1 percent to 11,842.88.

OIL: West Texas Intermediate for April delivery climbed 78 cents, or 1 percent, to settle at $80.46. Brent crude was trading up 35 cents to $86.18 per barrel.

Oil traders continue to watch for news about China’s reopening and bristled in early trading yesterday when Beijing announced its target GDP for the year will be about 5 percent, which is lower than the 5.5 percent that the country targeted last year. OilPrice.com noted that some economists hoped for 6 percent growth in China for the year. The 5 percent represents China’s lowest forecast in over 25 years.

Brent crude is approaching its high of $86.72 per gallon in mid-February.

TRENDPOST: Oil continues to be our wildcard because there are so many conflicts around the world. Watch for oil prices to rise this spring as the Ukraine War drags on, tensions between Iran and Israel boil over, and the U.S. Dollar remains persistently high.

GOLD: Gold for April delivery was unchanged yesterday at $1,854.60 an ounce, with investors waiting to see what Powell says at his two-day hearing in front of Congress. Despite concerns of higher interest rates, the weakening U.S. dollar helped support gold prices. We have long noted that high interest rates will scare away potential gold buyers because high rates can affect the opportunity cost of holding non-yielding bullion.

TRENDPOST: We remain bullish on gold because of all the economic and geopolitical uncertainty around the world and believe the precious metal is underpriced. 

BITCOIN: The world’s most popular crypto remained around $22,500 per coin yesterday after shedding more than 5 percent on Friday due to Silvergate Capital’s warning that it may not be able to operate for another year. The California-based company took a financial hammering after the collapse of two big clients: FTX and Alameda Research. Yahoo! Finance noted that Silvergate’s stock is down 95 percent over the past year.

Bitcoin is at its lowest levels since early February.

TREND FORECAST: Bitcoin will stay in the $22,000-$23,000 range before Friday’s jobs number. If the jobs number comes in higher than expected, the chances of the Federal Reserve raising interest rates more aggressively increases, so more would-be investors into the crypto will look to Treasuries for their yields. 

TODAY: DOW DOWN AFTER FED HEAD SPREADS INTEREST RATE HIKE FEARS

The Dow Jones Industrial Average fell 574.98 points, or 1.72 percent, to close at 32,856.46, and the benchmark S&P 500 was also down 62.05, or 1.53 percent, to close at 3,986.37. The tech-heavy Nasdaq Composite was down 145.40, or 1.25 percent, to close at 11,530.33.

Jerome Powell, the head of the Federal Reserve, told the Senate Banking Committee today that the latest economic data have come in stronger than expected, and that “the ultimate level of interest rates is likely to be higher than previously anticipated.”

“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” he said.

The comments spooked nearly every sector. The 2-year Treasury saw its yield top 5 percent for the first time since 2007, which was a percentage point higher than the 10-year Treasury yield, which investors often look at to gauge the risk of the economy sinking into a recession.

Elsewhere, London’s FTSE shed 10.31 points, or 0.13 percent, to close at 7,919.48 and the benchmark STOXX600 was down 3.58, or 0.77 percent, to 460.60. Tokyo’s Nikkei was up 71.38, or 0.25 percent, to 28,309.16, and South Korea’s Kospi was up 0.73, or 0.03 percent, to 2,463.35. Hong Kong’s Hang Seng was down 68.71, or 33 percent, to 20,534.48 and China’s Shanghai Composite also shed 36.93, or 1.11 percent, to close at 3,285.10. The Shenzhen Component dipped 234.30, or 1.98 percent, to close at 11,608.58.

Weak trade data in China took a toll on key indices due to the likelihood of a recession hitting the U.S. and Europe due to higher interest rates.

Exports in January and February fell 6.8 percent from last year to $506.3 billion.

TREND FORECAST: Again, and again, the reality is simple and so is the formula. The economy and equity markets should have crashed when politicians launched the COVID War in 2020 and forced people to be locked up in their homes as they locked down the economy.

Instead equities and the economy were artificially stimulated with countless trillions pumped in by Washington and zero interest rate policy by the Fed Banksters.

Therefore, now that the cheap money scheme has dried up, the higher interest rates rise the deeper the economy and equities will fall… and as we have warned, get ready for March Madness.

TREND FORECAST: We also maintain our forecast that the Federal Reserve will lower interest rates to pump up America’s economy in the run-up to the 2024 Presidential Reality Show®.

OIL: Brent crude fell $3.05 per barrel, or 3.54 percent, to $83.13 today, and West Texas Intermediate was also down $3.09, or 3.83 percent, to $77.38 at the time. Oil was pulled down by the growing risk of a U.S. recession and a strong U.S. dollar.

TRENDPOST: Recession fears and a high U.S. dollar will continue to weigh on oil prices. However, as we have warned, should the U.S. and NATO ramp up the Ukraine War and should Israel engage in a military confrontation with Iran, Brent Crude will spike above $130 per barrel. 

GOLD: Trends Journal subscribers know that the price of gold is impacted by the value of the U.S. dollar, due to foreign investments, thus the precious metal was down $36 an ounce, or 1.94 percent, to 1,818.60.

The dollar index gained 1 percent today after Fed Head Powell met with Congress to talk about the state of the U.S. economy and the high threat of higher interest rates.

“Restoring price stability will likely require that we maintain a restrictive stance of monetary policy for some time,” he said.

The CME FedWatch Tool noted that markets started to price in a 66 percent chance of a 50-basis-point hike at the March meeting, which is higher than the 25-basis-point increase last month.

TRENDPOST: High Treasury yields and the strength of the U.S. dollar will continue to put downward pressure on gold prices that should be rocketing due to the global socioeconomic and geopolitical instability. Watch for gold to trade sideways for the next few days and potentially shed more value if the jobs number at the end of the week comes in hot.

However, as economies and equities fall dramatically lower, we forecast gold prices will soar much higher as investors seek safe-haven assets. 

BITCOIN: The world’s most popular crypto was trading lower all day today and dipped even further after Powell’s meeting with the Senate Banking Committee. Bitcoin was down $203.30, or 0.91 percent, to $22,206.30 per coin as of 2:37 p.m. ET.

Powell noted that the latest key economic data came in hotter than expected, “which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated.”

Crypto Potato noted that bitcoin slipped below $22,000 during Powell’s speech to mark a three-week low.

“The data from January on employment, consumer spending, manufacturing production and inflation have partly reversed the softening trends,” Powell said.

TRENDPOST: As we had forecast, Bitcoin must break strongly above $25,000 per coin to find strength.

Note: The views expressed on on-aviation.com are not necessarily those of On Aviation™.