Investing in the stock market in today’s economic atmosphere is a risky move, according to some economists. Economists around the country think Trump’s economic policies will eventually throw the country into a recession. The trade war with China, the Brexit situation in Europe and the shaky trade relationship with Mexico over immigration issues won’t go away. Mr. Trump will not impose a five percent tariff on Mexican exports, but that’s not enough to save the country from a recession, according to several economists.
The inverted bond yield between the three-month and five-year Treasury notes is a sign that a recession could change the investment playing field by the end of 2019. If an inverted bond yield lasts for a full quarter, it’s a safe bet that recession will strike.
The threat of a recession may be new news to some investors, but Shervin Pishevar, one of Silicon Valley’s super investors told investors they were in for trouble in March 2018. That’s when Pishevar went on a 21-hour tweet storm that sent shock waves through the investment industry.
Shervin Pishevar tweets were a combination of facts and future predictions. Investors now know Mr. Pishevar knew something they didn’t know about the Trump organization. Shervin Pishevar knew Trump’s tax cut was a short-term fix. The tax cut blinded some investors, but Shervin Pishevar’s tweetstorm tried to make them see no asset class was safe as long as Mr. Trump was in the White House.
Some of Shervin Pishevar’s tweets were radical predictions. He predicted a major stock market drop. The stock market is down, but not as much as Shervin Pishevar predicted. But there are signs the stock market is under attack by Trump’s tariff addiction. Shervin also sent a tweet that warned investors about Silicon Valley losing its number one spot in the startup world. But even though China, Brazil, India, and other countries are in the startup game they don’t compare with Silicon valley’s startup output.
Shervin’s tweet about the Feds raising interest rates came true in 2018. But according to Fed Chairman Jerome Powell, the Feds may have to cut interest rates in 2019 to keep the U.S. economy healthy.