Prepare for a staggering 30% decline in stocks and an impending recession, warns renowned market forecaster, Gary Shilling. In a recent interview on “The Julia La Roche Show,” Shilling predicted a significant market downturn, citing many economic indicators that point towards an economic downturn.
Shilling, who correctly predicted major market trends for over 50 years, has a history of making accurate predictions. He indicated that the US economy is showing signs of weakness, with an inverted yield curve and declining leading economic indicators. Citing these factors, Shilling suggested that a recession may already be underway.
The S&P 500, which reached a record high in January last year, could plummet to around 2,900 points, its lowest level since May 2020, according to Shilling’s forecast. Shilling, the president of A. Gary Shilling & Co., believes that the US economy will weaken, leading to a significant drop in corporate profits and stock prices.
Shilling also predicted lower inflation in the years ahead, attributing it to the long-term trend of globalization which pushes down prices. He anticipates that the Federal Reserve will cut interest rates deeply into next year to combat weakening economic conditions.
The market prophet, who accurately predicted the collapse of the mid-2000s housing boom, shared his investment strategy, which includes betting on Treasury bonds and the US dollar, while taking positions against stocks and commodities. He also identified commercial real estate, including office buildings, hotels, and shopping malls, as the “biggest bubble” and suggested that it may be on the verge of bursting.
Shilling’s warnings about a potential economic recession and significant stock market decline have raised concerns among investors and economists, as they closely monitor economic indicators and market trends for signs of an impending downturn.
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