We're Nearing the End of the Downturn... But We're Not There Yet

Editor's note: Today in the Weekend Edition of Empire Financial Daily, our friend and colleague Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – is back to discuss a silver lining in the midst of the big buildup of negative sentiment in the markets... I don't need to keep harping on the market's […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily Weekend] Editor's note: Today in the Weekend Edition of Empire Financial Daily, our friend and colleague Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – is back to discuss a silver lining in the midst of the big buildup of negative sentiment in the markets... --------------------------------------------------------------- We're Nearing the End of the Downturn... But We're Not There Yet By Marc Chaikin --------------------------------------------------------------- [EV Mandate Sending Stock Shock Waves]( California has just issued an electric vehicle mandate – and 17 other states are planning to follow its lead. [Here's the one stock you need to own in order to profit from this EV boom](... --------------------------------------------------------------- I don't need to keep harping on the market's struggles... Even with its most recent bounce, the S&P 500 Index is still down about 20% in 2022. And the tech-heavy Nasdaq Composite Index remains in full-on crash territory. It's down more than 30% from its November 2021 peak. With stocks down, it means less money for most investors. But it's even worse... Prices of nearly all household items are still sky high, even with cooling inflation. The average American consumer is faced with a big problem... They have less money to spend on items that are more expensive than ever before. If you're like most people, you haven't had much confidence in our economic outlook lately. In fact, one of the leading indicators used to predict investors' feelings shows that things haven't been this bad in decades. That's tough to hear. But you might be surprised to learn this... It likely means we're nearing the end of this downturn. The leading indicator I'm talking about is the University of Michigan's Consumer Sentiment Index. Put simply, the Consumer Sentiment Index tells us how confident the average Joe is in the economy at any given time. It's sometimes referred to as "consumer confidence." The bottom line is this... Consumer spending is the bedrock of the economy. And confident consumers spend money. So rising levels of confidence drive bull markets. And on the flip side, falling levels of confidence drive bear markets. The bad news is, people are feeling pretty down on their luck these days. After all, we're in a bear market. --------------------------------------------------------------- Recommended Link: [The ONLY way to play markets like these]( Warren Buffett once said, "Price is what you pay... value is what you get." The best investor in the world knows the only way to prosper (especially in markets like these)... is to invest in VALUE. But this $2 stock could be the last value play in the market today. [See why this $2 stock go up 25 times and still be a bargain here](. --------------------------------------------------------------- But fortunately, our current situation has a silver lining... Historically, big extremes in consumer sentiment are a major buying opportunity. Take a look at the chart below. As you can see, sentiment hit a major low this summer... If you're nervous about the economy, you clearly aren't alone. Consumers haven't felt this bad in more than 40 years. But here's the good news again... History tells us we should be on the verge of a major turnaround. Consumer confidence hasn't been this low since 1980. And of course, if you've followed the markets at all since then, you know... that's when a 40-year-long secular bull market was born. The 1970s were full of struggles for the American consumer. The decade featured volatile markets, soaring prices of household items, and supply shortages. Many people lost their savings. If you think about it, that's not too different from today. Now, here's a key part of this message you can't afford to miss... Today's extreme isn't flashing the big buy signal yet. We're still not completely out of the woods. Inflation remains higher than normal. And volatility continues to plague the market. I'm simply saying that the worst is likely behind us. That means the end is in sight. But the truth is, even though consumer confidence bottomed in 1980, the next bull market didn't start immediately. The 40-year-long bull market wasn't born until 1982. The same thing happened in 2008... Consumer confidence bottomed in the summer of 2008. But the markets didn't bottom until the first few months of 2009. That means now, more than ever, we need to watch the markets closely for opportunities. And we need to deploy our capital in the right places... Even if it feels like everything is going wrong in the market, you can still find pockets of opportunity. That's the beauty of investing. Fortunately, our Power Gauge tool helps us identify the best sectors at any given time. So at Chaikin Analytics, we'll know exactly where the big money is flowing once the markets start recovering. But for now, our path forward is simple... Be patient. Get confident about the coming recovery. And trust the data. Regards, Marc Chaikin December 17, 2022 Editor's note: Marc has spent nearly 50 years on Wall Street working with investing legends like Steve Cohen, Paul Tudor Jones, and George Soros. There's probably only a handful of investors in the world with the kind of experience and track record that could be compared to Marc... so we urge you to check out his brand-new presentation on his biggest prediction yet, including his No. 1 stock to buy in the new year... and the No. 1 stock to avoid. [Watch it right here](. --------------------------------------------------------------- If someone forwarded you this e-mail and you would like to be added to the Empire Financial Daily e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 380 Lexington Ave., 4th Floor, New York, NY 10168 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](