It’s all well and good to announce positive economic news. Yet, consumers of such news may not be getting the full story.In other words, there’s plenty of less-than-positive economic developments, and I’ll point out just three which portend a possible economic contraction.The first one has been well-advertised: the developing commercial real estate crisis. In a nutshell, office building owners face higher interest rates as their loans mature. This could set off a wave of defaults. Indeed, there’s already been a dramatic rise in the number of U.S. commercial property foreclosures in the past four years.Another sign of a developing economic slowdown has to do with consumers. If you live in the U.S., quite a few of your neighbors — or at least residents of your community — are tapped out.Here’s a chart from the March Elliott Wave Financial Forecast, a monthly publication which covers major U.S. financial markets:As you can see, credit card delinquencies have been rising since 2022. Indeed, credit card arrears are higher than they’ve been since the wake of the Great Recession in 2007-2009.And speaking of the Great Recession, sub-prime car loan delinquencies are even higher than they were then.The March Elliott Wave Financial Forecast elaborates with this chart and commentary:Car loan delinquencies are higher than at any time in the data’s history, which goes back to 1996. … Credit standards are tightening, thereby freezing out borrowers. … Access to auto credit is the lowest in nearly four years.Also keep in mind that the economy follows the stock market.If the stock market goes into a correction — or worse — expect the economy to weaken. History shows that there’s usually a few months lag time between the action of the stock market and economy.Elliott wave analysis can help you get a handle on the stock market’s trend.If you’re unfamiliar with the Elliott wave method, read Frost & Prechter’s Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here’s a quote from the book:All waves are of a specific degree. Yet it may be impossible to identify precisely the degree of developing waves, particularly subwaves at the start of a new wave. Degree is not based upon specific price or time lengths but upon form, which is a function of both price and time. Fortunately, the precise degree is usually irrelevant to successful forecasting since it is relative degree that matters most. To know a major advance is due is more important than its precise name. Later events always clarify degree.More By This Author:What To Make Of Record Bullish Market BetsBYD China Races By Tesla In Electric Vehicle SalesInvest In The Electrical Grid For Smart Energy Exposure
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