9 out of 50 US states fall into recession

Manufacturing activity index in the United States showed that the United States reached the 2009 level of this index. At the same time, according to the results of 2019, the US stock market gained from 30% to 40% and updated historical highs.

Such records against the backdrop of an increasing number of problems in the economy, the presence of, is confirmed by statistics, which once again confirms of the presence of a huge price bubble in the US stock market.
In today's review, we will demonstrate that weak data on the US ISM Production Index is not an accident, but part of the picture.

According to the Federal Reserve Bank of Philadelphia, the economy of at least 9 US states will fall into recession in 6 months. The last time this happened (more than 10 years ago) just after the global financial crisis.

The index covers the Third Federal Reserve District (the jurisdiction of the Philadelphia Fed). The index includes such economic data as permission to build houses, the number of unemployment benefits, the spread between long-term and short-term US treasury bonds, etc.

The economies of West Virginia, Pennsylvania, Delaware, Montana, Oklahoma, Vermont, New Jersey, Kentucky and Connecticut will contract in the foreseeable future.

Such data is not only an extremely alarming signal for the US economy as a whole but also a kind of “black mark” on Trump. The basis of his election campaign - economic growth in the country - is smashed to smithereens about the real data. The arrival of the Democrats may provoke a change in the vector of economic policy from corporations to households, which can only aggravate the already bad situation in the US manufacturing sector.

Recall that we consider 2019 the last year of unjustified growth in the US stock market. Already in 2020, it will begin to adjust. The scale of correction is from 50% and higher. Given that in recent years, shares of technology companies in the US stock market have grown by an average of 7-8 times (and some issuers have shown growth of 10 or even 20 times), the US stock market will no doubt become the object of massive sales. We recommend participating in this process, selling both the market as a whole (Nasdaq index) and the shares of individual issuers (Apple, Microsoft, Alphabet, Oracle, etc.).