{"id":169687,"date":"2020-04-29T17:14:53","date_gmt":"2020-04-29T21:14:53","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=169687"},"modified":"2020-04-29T17:14:53","modified_gmt":"2020-04-29T21:14:53","slug":"q1-gdp-data-masking-the-true-global-economic-future","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2020\/04\/q1-gdp-data-masking-the-true-global-economic-future\/","title":{"rendered":"Q1 GDP Data Masking The True Global Economic Future?"},"content":{"rendered":"
April 29, 2020<\/div>
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By TheTechnicalTraders<\/u><\/a>\u00a0<\/strong><\/p>\n

– As Q1 GDP data is released on Wednesday, April 29, which will reflect the first three months of 2020 in terms of total economic output, we believe the number will skew the current true global economic conditions to a large degree.\u00a0 The pandemic shutdowns started in the US on March 15th<\/sup> \u2013 nearly 2 weeks before the end of Q1:2020.\u00a0 Thus, we had a fairly normal Q1 in terms of economic activity, production, and consumer engagement. Everything changed after March 15th<\/sup>, 2020.<\/p>\n

Skilled traders need to watch the current economic data and \u201cweek over week\u201d data that is presented.\u00a0 Skilled traders also need to pay attention to the news items that are being pushed out to the public.\u00a0 Larger and larger corporations and sectors are moving towards bankruptcy or screaming for a bailout. Airlines, Hotels, Car Rental, and dozens of other sectors have all collapsed over the past 5+ weeks.\u00a0 We expect real estate activity and pricing to collapse as well.\u00a0 The results of the last 5+ weeks, after the March 15th<\/sup> shutdown started, have been anything but normal.<\/p>\n

We continue to believe the current data and news, which is still representative of the Q1 (pre-shutdown) economic activity may lull investors\/traders into believing the global economy will rebound fairly quickly from this virus event.\u00a0 Traders\/investors are looking at this current data and thinking, \u201cwell, this isn\u2019t so bad\u201d.\u00a0 But they are failing to understand the true scope of the economic contraction event and what the longer-term outcome is likely to be in terms of recovery.<\/p>\n

Total World GDP Output<\/h3>\n

The total world GDP output was approximately $190 trillion.\u00a0 An estimated 15% to 20% global GDP contraction as a result of the Covid-19 virus event would shave $28.5 to $38.0 trillion right off the top of the 2020 global economic output.\u00a0 Should the global shutdown last through the end of May 2020 (or beyond in some form), we believe the contraction in global GDP could become even more severe.<\/p>\n

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The complicated issues that arise from this global contraction in GDP also bleed over into supply-side economics.\u00a0 As the world attempts to \u201cshelter in place\u201d to avoid spreading the virus and risking more lives, demand collapses. Once demand collapses enough (resulting in price level collapses as we\u2019ve seen in Oil) the result in production\/supply issues becomes even more complicated.\u00a0 Unlike Eggs or Milk, one simply can\u2019t bury or destroy other types of supply.\u00a0 The destruction of certain industries, resources, and capabilities will become very real over time as a result of any extended contraction event.\u00a0 The longer-term results of this type of event are sometimes called \u201cstagflation\u201d \u2013 where price levels rise as income and economic output stay moderately flat.<\/p>

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BEFORE WE CONTINUE, BE SURE TO\u00a0OPT-IN TO MY FREE MARKET TREND SIGNALS<\/strong>\u00a0SO YOU DON\u2019T MISS OUR NEXT SPECIAL REPORT!<\/em><\/p>\n

Custom Smart Stock Market Index<\/h3>\n

Our Custom Smart Cash Index highlights the \u201cnew price channel\u201d that setup recently and why all traders\/investors should really start to pay attention to how the global markets have transitioned into a new phase or price cycle.\u00a0 You can see from the chart, below, that the global markets broke below an upward price channel that has been in place since 2012 recently and has established a new downward price channel spanning the December 2018 lows to the February 2020 highs.<\/p>\n

We believe the current upward price trend on this chart is nothing more than a \u201cbullish retracement in a bearish trend\u201d and that the global markets will begin another downside price move within 5 to 10+ days.\u00a0 As we\u2019ve been trying to share with you over the past few weeks, the longer-term global economic disruption is just getting started.<\/p>\n

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US Dollar Daily Chart<\/h3>\n

We believe the US Dollar will enter a new phase of increasing demand throughout the world as global economies begin to feel the pressures of the demand-side collapse.\u00a0 We believe the US dollar is uniquely positioned to benefit from the global economic crisis simply because the US economy is the biggest and most capable economies on the planet in terms of the ability to recover from this virus event.\u00a0 As foreign nations attempt to deal with weakening currencies and economies related to the collapse in demand and continued virus-related economic transitions, we believe the US economy will be one of the first global economies to regain any real growth over the next 2 to 3+ years.<\/p>\n

Thus, we believe the US Dollar may attempt another quick downside valuation move, similar to what happened in February\/March 2020, then rally to levels above 102 again as continued economic data hit the markets.\u00a0 Remember, valuation levels of currencies are often based on future expectations of economic stability and capability for any nation.\u00a0 The US Dollar is a bit different because it is also the \u201ccurrency of choice\u201d in terms of global economic activity.\u00a0 We believe the US Dollar could begin a moderate \u201cmelt-up\u201d process as the virus data continues to scorch the world\u2019s economic output.<\/p>\n

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Concluding Thoughts:<\/h3>\n

These longer-term economic expectations are key to understanding how the recovery process will create opportunities for skilled traders and investors.\u00a0 We believe the world will survive this virus event.\u00a0 Yet, we also believe the global economic landscape will likely change over the next 3+ years as this virus event could very easily push many foreign nations away from economic relationships or projects they have engaged in over the past 10+ years.\u00a0 This virus event is really a \u201cbig game-changer\u201d in terms of how and what the future of the global economic world will look like for many.<\/p>\n

As we\u2019ve warned many times, it is not the localized \u201cone-off\u201d economic event that presents a real problem for the global economy \u2013 central banks can simply patch the economy up with an infusion of cash.\u00a0 The bigger problems for the global economy happen when a fundamental shift takes place that lasts 6 to 12+ months and disrupts the \u201csystems\u201d in place throughout the globe.\u00a0 We believe this virus event could start a process that disrupts supply, demand, consumer engagement, and true valuation levels of almost all commodities and assets throughout the globe over the next 24+ months.<\/p>\n

In Part II of this article, we\u2019ll attempt to share more data and highlight where opportunities may present real profit objectives for skilled investors and traders.<\/p>\n

The next few years are going to be full of incredible opportunities for skilled traders and investors.\u00a0 Huge price swings, incredible revaluation events, and, eventually, an incredible upside rally will start again.<\/p>\n

I\u2019ve been trading since 1997 and I\u2019ve lived through numerous market events.\u00a0 The one thing I teach my members is that risk is always a big part of trading and that\u2019s why I structure all of my research and trading signals around \u201cfinding profits while reducing overall risks\u201d.\u00a0 Sure, there are fast profits to be made in these wild market swings, but those types of trades are extremely risky for most people \u2013 and I don\u2019t know many successful traders that want to risk their hard-earned money when daily price swings in various assets are moving 10% to 95%.<\/p>\n

I\u2019m offering you the chance to learn to profit, as I do with my own money from market trends that I hand-pick for my own trading.\u00a0 These are not wild, crazy trades \u2013 these are simple, effective, and slower types of trades that consistently build wealth.\u00a0 I issue about 2 to 4+ trades a month for my members and adjust trade allocation based on my proprietary allocation and risk algo \u2013 the objective is to gain profits while managing overall risks.<\/p>\n

You don\u2019t have to spend days or weeks trying to learn my strategy.\u00a0 You don\u2019t have to try to learn to make these decisions on your own or follow the markets 24\/7 \u2013 I do that for you.\u00a0 All you have to do is follow my research and trading signals and start benefiting from my trading experience.\u00a0 My new mobile apps make it simple \u2013 download the app, sign in and everything is delivered to your phone, tablet, or desktop \u2013 updates, videos, education, and trade alerts.<\/p>\n

I offer membership services for active traders, long-term investors, and wealth\/asset managers.\u00a0 Each of these services is driven by my own experience and my proprietary trading and risk modeling systems.\u00a0 I have a small team of dedicated researchers and developers that do nothing but research and find trading signals for us to take advantage of together. Our objective is to help you protect and grow your wealth.<\/p>\n

Please take a moment to visit\u00a0TheTechnicalTraders.com<\/u><\/a><\/strong> to learn more.\u00a0 I cannot say it any better than this\u2026\u00a0 I want to help you create success while helping you protect and preserve your wealth \u2013 it\u2019s that simple.<\/p>\n

Chris Vermeulen
\nChief Market Strategist
\n<\/u><\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By TheTechnicalTraders\u00a0 – As Q1 GDP data is released on Wednesday, April 29, which will reflect the first three months of 2020 in terms of total economic output, we believe the number will skew the current true global economic conditions to a large degree.\u00a0 The pandemic shutdowns started in the US on March 15th \u2013 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-169687","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169687","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=169687"}],"version-history":[{"count":1,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169687\/revisions"}],"predecessor-version":[{"id":169691,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/169687\/revisions\/169691"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=169687"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=169687"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=169687"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}