The one thing that could trigger the stock market rally in just a few days

VaselineSeptember 10, 2024

0 5 minutes read

The one thing that could trigger the stock market rally in just a few days

Editor’s note: My colleague Luke Lango, senior investment analyst at InvestorPlace, has identified a rare economic event that historically triggers a stock market boom. It has occurred three times in the last 30 years – in 1995, 1998 and 2019 – each time causing market surges. According to oddsmakers, there is a 100% chance that this event will happen again in less than 10 days.

Luke hosts a breaking news Wednesday, September 11 at 8:00 PM ET to help people prepare for this rare economic dynamic. Despite September’s slow start, he believes this event will trigger numerous stock breakouts and has selected three trades poised for significant growth.

Read his message below to find out why he believes these circumstances will work out again. And book your place for Luke’s briefing here.

The stock market recently found itself in a bout of volatility, but that could all change in less than 10 days.

While the S&P 500 is up about 15% so far in 2024, almost all of those gains have come in the first half of the year. Over the past two months, stocks have gone virtually nowhere. During the 4th of July weekend, the S&P 500 was trading at 5540. Today, it is trading at 5465.

Sixty days later. Zero upward progress.

Stocks are blocked.

But due to this rare economic event, stocks can unlock in less than 10 days.

This very specific, very strong and very rare economic dynamic has occurred only three times in the last 30 years. Each time it has done so, it has strengthened the economy and sent stocks higher — even if they had fallen beforehand.

One, we have declining stocks.

Then last Thursday, the ADP Employment report came in very weak. Friday’s official jobs report was similarly lackluster. The unemployment rate is rising. Available positions are collapsing. Now there are barely more open jobs than unemployed.

Second, the US labor market is weakening.

Next, the CPI inflation rate is expected to ease to 2.5% in next week’s report. And real-time estimates point to 2.3% inflation since September, given the huge drop in oil prices so far this month.

Third, inflation continues to ease.

The point is: Because of this rare set of economic circumstances, the current tug-of-war between soft-landing bulls and recessionary bears is about to end. And the bulls will win.

And stocks will rise.

The recent lack of upward progress in the stock market can be attributed to only one thing: recession fears. Economic data has weakened significantly over the past two months, with the unemployment rate rising by about 10%, job openings falling by about 10% and real-time estimates for GDP growth falling by nearly 10%. The economy is clearly slowing down.

But because of the rare economic dynamics that are about to emerge, that will no longer matter.

The domino effect that will reignite the economy

High rates have frozen the housing market. They also froze the auto market, the home repair market, and the construction and manufacturing industries. High rates have made it harder to borrow money and more expensive to pay off debt, leading to a major slowdown in consumer spending. They put off big-ticket purchases like travel. And they forced people to save money in high-interest savings accounts.

High rates have slowed the economy.

But according to the numbers we crunched, this rare economic event is about to revive the economy.

Sure, it won’t immediately thaw the housing or auto markets. It will neither revive consumer spending nor create significantly better lending conditions in less than 10 days. But as time goes on and this rare economic event continues to happen, it will. And that’s exactly what we think will happen next year.

Next year we will see the housing and auto markets thaw. We will see the resurgence of the construction and manufacturing industries. It will become much easier to borrow money and pay off debts. Consumer spending will be reactivated. Many of us will open our wallets and start making big purchases again.

This rare economic event will make a difference.

And that’s why, in less than 10 days, stocks will unlock.

The market knows this and as such is just waiting for the first domino to fall. Once that happens, I suspect you’ll see a crazy explosion with traders rushing to pile back into stocks, the economy will strengthen significantly, and stocks will rise.

That’s my take on the current situation.

Shares to buy at dip

That said, which stocks should you buy? AI actions. AI actions. And more AI actions.

Our research suggests that the underlying investment momentum in the ‘AI Boom’ is only strengthening despite broader market volatility.

Last Wednesday night, for example, AI firms C3.ai Inc. (you), Hewlett Packard Enterprise Co. (HPE), Verint Systems Inc. (VRNT), and Credo Technology Group Holding Ltd. (CRDO) all reported quarterly revenues. These stocks mostly fall after earnings. But the numbers and comments from the earnings reports were very positive.

C3.ai, for example, reported accelerating revenue growth amid huge growth in AI pilot offerings.

Orders and revenue for HPE’s AI systems grew by double digits from the previous quarter, with management reporting that interest in AI from large enterprises and other large enterprises is strong and adoption is accelerating.

Verint reported that its AI bookings grew by more than 40% year-on-year, driven by growing demand for AI chatbots in call centers.

Meanwhile, Credo said it is seeing a rapid expansion of AI deployments, with the rise of generative AI driving strong demand for cutting-edge, energy-efficient and high-speed connectivity solutions.

The fundamentals behind the AI Boom – and AI stocks – remain very strong. Indeed, they are getting stronger.

AI stocks are going through a bit of a valuation/sentiment reset right now. That’s good. It’s normal. Let it happen. Smart investors should be ready to buy dips at high technical support levels due to strong fundamentals.

So, prepare your Shopping List. Make sure you have some great AI actions and pull the trigger on some new trades once the technical support comes out for this market.

The Final Word

While stocks have been stuck in neutral for the past couple of months, as I said, I think they’re about to wake up in a big way. If I’m right, a lot of money could be made in the markets between now and the end of the year.

And that’s why I’m holding an urgent strategy session next week for people to help them prepare for this major economic event.

We intend to address all of these and more within our framework breaking news Wednesday, September 11 at 8:00 PM Easterndesigned to help you prepare for this rare economic dynamic.

Shortly before we start, I will send you an email with the subject (The Great Technical Reversal of 2024): Your access link. To join me, just click on the link in that email.

To make sure you get that email, just reserve your seat for my briefing by clicking here.

Most importantly, in this briefing, we intend to reveal a game plan to help you take advantage of this rare economic dynamic.

So don’t run away from the current market volatility as September is usually a bad month for stocks.

Rather, embrace it. Participate our special briefing on Wednesday, September 11 at 8:00 PM ET. And learn how to potentially turn that volatility into profit.

Click here to sign up for my strategy session on how to best prepare for this potential market meltdown.

Sincerely,

Luke Lango

Editor, Investing in hypergrowth

VaselineSeptember 10, 2024

0 5 minutes read

Vaseline

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