Every Monday, Rodney and I issue a forecast report to our Boom & Bust subscribers. We like to think of it as a preview of what’s to come based on the week. Or at least a set of predictions; it’s hard to anticipate exactly what is going to happen in a given week, especially in the present landscape. However, last week’s events – with the herky jerky markets, gold’s failed breakout, and the flip of the yield curve, produced such volatility that we feel it would be most advantageous to extend this week’s 5 Day Forecast to Economy & Markets readers. This is the caliber of research and analysis  that Boom & Bust subscribers have grown used to. We hope you’ll consider joining. – Harry

The stock market hit a predictable snag when it hit the top of the mini-megaphone pattern I have been projecting at 27,400. One of the clear reasons: The China trade deal keeps looking less likely – as Rodney and I have been forecasting from the beginning.

But the larger reason has been that the bond market keeps seeing a slowing global economy. Hence, yields on the 10-year Treasury just keep falling with only a minor bounce in recent days that does not look likely to last.

Here’s the bigger picture since the 2007 economic peak.

Falling Treasury Yields 

Yields have actually been falling in a more predictable channel since 1989. But they have been consolidating and moving more sideways in a channel since 2012. It now looks like the top was likely put in last October, at 3.25%. The last low in 2016 was 1,36% and yields are likely to continue to fall in the next few months towards a slight new low around 1.32%.

Normally bond yields would be rising with inflation in the late stages of an economic boom. But not this “perverted” one this far. But we could still see a significant rise in longer term rates in the final bubble stages still predicted ahead. That will give a final buy signal for longer term bonds.

If bond yields continue to fall, then stocks are likely to continue to correct in the deeper correction scenario off the mini-megaphone top first. Then we could see the final Dark Window rally into a top that would come later in 2020 rather than early.

A likely scenario is that the Fed continues to be more muted in lowering rates, then starts to panic and gets more into Trump’s call for more aggressive rate cuts with continued falling rates. Maybe we finally see that 50bps cut in October or November.

Then stocks would rally, and bond yields could bottom for a while, likely with signs of a bump in growth rates from stimulus programs in China, Europe and Japan, with similar expectations for the U.S. after stronger easing.

 Longer-Term Trends are Still Clear

10-year Treasuries should go to historically low yields towards zero by late 2022 or so, near the bottom of the next greater financial crisis and depression. That will fulfill a grand 40-year up and 40-year down cycle since the last depression low yields in 1941!

Then the gold bugs get their inflation trends again, but global growth will be moderate as will inflation rates – so still NO hyperinflation.

When such bond yields finally hit bottom in 2022 or so: sell bonds, and buys stocks, gold and commodities!

New Update on the Markets!

Harry Dent shares details on his latest prediction for the markets and the new dangers that lie just ahead for Americans:   “This is no longer a question of ‘if,’ but simply a… Read More>>
Harry Dent
Harry S. Dent Jr. studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of his chosen profession that he turned his back on it. Instead, he threw himself into the burgeoning new science of finance where identifying and studying demographic, technological, consumer and many, many other trends empowered him to forecast economic changes. Since then, he’s spoken to executives, financial advisors and investors around the world. He’s appeared on “Good Morning America,” PBS, CNBC and CNN/Fox News. He’s been featured in Barron’s, Investor’s Business Daily, Entrepreneur, Fortune, Success, U.S. News and World Report, Business Week, The Wall Street Journal, American Demographics and Omni. He is a regular guest on Fox Business’s “America’s Nightly Scorecard.” In his latest book, Zero Hour: Turn the Greatest Political and Financial Upheaval in Modern History to Your Advantage, Harry Dent reveals why the greatest social, economic, and political upheaval since the American Revolution is on our doorstep. Discover how its combined effects could cause stocks to crash as much as 80% beginning just weeks from now…crippling your wealth now and for the rest of your life. Harry arms you with the tools you need to financially prepare and survive as the world we know is turned upside down! Today, he uses the research he developed from years of hands-on business experience to offer readers a positive, easy-to-understand view of the economic future by heading up Dent Research, in his flagship newsletter, Boom & Bust.