September 2024 barometer update
Eurozone inflation has reduced leading to expectations of a rate cut. European markets have reacted strongly. The FTSE is following suit closing above 8400 this month in spite of the impending budget and the likely strain on public finances.
The Sector Rotation Clock has advanced within the Mid Expansion zone in the cycle. It is being pulled forward by the defensive stance taken by markets given the current fears about hard and soft landings.
As a result, the late phase sectors in the Contraction zones have become bullish. However the second phase of the 18.6 year Real Estate Cycle does not move that quickly and will take a few years to play out. I estimate that we are currently at around 4 pm in the cycle.
To summarise the indicators:
The Barometer has reduced again to 0.
The Hi-Lo-Grometer is now in the light green zone. It is safe to buy stocks.
The US Treasury Yield indicator has remained heavily inverted and is still below the -150 points zone. The anomaly continues.
The Sector Cycle is advancing and I am expecting stock markets to rally this autumn.
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