This past weekend, Donald Trump, the leading Republican candidate for the Presidency of the United States, predicted in a Washington Post interview that we are headed for "a very massive recession." His prognostication goes against what most analysts are forecasting and the fact that the stock market is within 500 points of its all-time high.
Now, Donald Trump is many things. But, he is not stupid and we should not rule out anything in today's marketplace. You don't become a billionaire by doing stupid things and certainly I think he has an interesting take on the current economic environment. Just as he has tapped into the anger of the average American citizen and his unlikely rise to the top of the Republican Party, don't dismiss what he is saying because you may or may not like him personally.
What has been fueling this market to the upside is free money from the Fed. It certainly hasn't been corporate profits. Most corporations have wrung out the last few vestiges of efficiency in their companies expenses.
Having said all that, I'm not totally convinced the market is going to go a lot higher. At the moment, the major indices are giving mixed signals, the Dow and the S&P 500 are positive while the NASDAQ is in a broad trading range. All three indices are very overbought and are due for some form of correction, in my opinion.
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