David Rosenberg Predictions

[19:28] I expect that they will raise rates. Do I I think it'll be a policy mistake. I don't think one rate hike will be a policy mistake, but if they raise their dots and they ratify what the market's priced in and then we're not talking about just one rate hike, but four or five, I don't think the economy can withstand it.

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[23:32] I think bonds are going to make up a lot of lost ground in the next few months.

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[30:29] Now, people won't be talking about five anymore like 1 to 3 months from now.

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[30:21] if you go down 20 basis points down to 480, it's going to freak out all the shorts. Yeah, they'll be forced to cover. Next thing you know, we'll be at four and a half.

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[29:40] I think bonds will outperforming stocks when you're taking a look the at the relative valuation levels and the fact that the stock market hasn't caught up to what the bond market's adjusted to already and then the bond market will rally and then probably with the lag the stock market will follow suit.

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[33:01] I am fundamentally bearish on the US dollar. Mhm. Uh I think biding policy is an absolute mess and now we're going to have fiscal gridlock... I think the US dollar is at risk of going through a long-term bare market.

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[31:26] I'm going to say right now we we hit what look to be a rock solid bottom at $4,000 an ounce. Despite the strength in the dollar, despite the boom in real interest rates, gold should have actually traded a lot lower. And we did like a triple bottom off the 4,000 an ounce.

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[34:45] I think the US dollar is going into a long and drawn out fundamental downtrend and gold is probably one of your most effective hedges against that.

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[32:30] are real rates going to go up even further from here? I don't think so. Uh, I think they'll I think they'll decline from here. The question will be how much? They're they're way too high.

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[21:25] We're going to have the November 3rd midterms and the question becomes uh are the rep Democrats going to take um the House? That looks like very strong likelihood. Uh will they take the Senate? That's a tossup.

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[21:41] We're going to have fiscal gridlock. So the past six years of unprecedented fiscal stimulus out of the Trump administration and before that Biden um because we fought CO and then never looked back. we just kept on with these massive deficits of 5% plus of GDP. That's going to change.

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[21:21] I think that we are going to be slowing down precipitously.

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[7:34] that's going to be the big challenge uh for the equity market filling expectations of the S&P moving to 8,000 or higher by the end of the year.

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[19:21] Yeah, both the um earnings estimates come down and the multiple compresses and uh I think there's a very good chance that's going to happen. and I would have no problem uh formulating that uh as as a base case.

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[20:49] Well, I guess you'll hide in healthcare and consumer staples.

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[0:00] I just tell you right now I think the Fed is going to make a big blunder the markets and and now it's not just one rate hiking priced in it's multiple. Um and uh people seem to think it's what I said that why do we get a crisis after a new Fed chairman chairperson they got tested and now he's being tested and he's falling for the test

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[14:33] I I'd have to think if there's a magical number and just a number, it would be it would be 5%. And uh we're getting there pretty quickly.

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[5:50] we have um quite a bit of the fund is in two-year notes right now. Now, that's just a bet on the Fed, but that won't be there a year from now.

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[19:42] 80% of the time you get a huge rally in the Treasury market. now now maybe it'll be different this time but I think that you can certainly bet with a high degree of confidence that you will get a rally in the front end of the curve as we're seeing taking place already. I think this is the thin edge of the wedge.

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[19:34] 80% of the time inflation slows down... after midterms when the party in power loses control of the legislative process and the executive branch

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[19:30] 80% of the time the economy slows down... after midterms when the party in power loses control of the legislative process and the executive branch

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[26:49] and then employment rate starts to hook up and all of a sudden we're going to be talking less about inflation and more on the labor market

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[26:34] I think that by the fourth quarter there's a good chance that that that this July negative print and payrolls will prove to have been no fluke. this was not just some sort of FIFA give back

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[0:00] I'm actually leaning to the view that their next move will be to cut rates uh not to raise rates.

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[4:57] I don't think they'll be hiking and then they're going to get stuck ahead of the uh uh the midterm elections. Uh and then you know it's very rare for them to make a move in December when liquidity conditions aren't exactly that flush and everybody's closing their books for the year.

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[5:13] I think there's a real opportunity at the front end of the yield curve uh which is still priced uh you know at least for one more hike. I think that's going to come out. The two-year note is actually a very good place to be. two years and three years uh in that part of the curve.

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[7:46] I think that the inflation numbers are going to surprise to the downside for the next several months. I think the economy will continue to grow but below potential which is going to put overall downward pressure on aggre aggregate prices.

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[5:59] we've had three quarters in a row where real GDP growth has averaged less than 1 and a.5%. And I think that when we get the Q3 data, it's going to be the same, like four straight quarters of one and a half% real GDP growth.

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[9:18] Um but at that point you're going to start to see the unemployment rate hook up.

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[9:35] I do think my assumption is that they will be in the next several months and quarters be shifting their attention uh back to the labor market. That's why rates and that's when we get a rate cut.

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[4:12] I'm I'm still I'm still if you're talking long-term 3 to five years, I'm still bullish on gold and the gold mining stocks.

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[28:39] I think inflation is going to surprise to the downside. And all the reasons for the Fed to swing hawkish is they're going to pivot the other way.

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[36:45] we have no population growth. So the supply side is almost as weak as the demand side is. That's not good news for the Canadian dollar. Uh that's for sure.

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[27:22] I think the Fed will be making the next move a cut and has nothing to do with Kevin Morris having a cow tout at President Trump. That's not going to happen. It's going to be the data. I think people will be surprised where inflation is by year end. And I think they'll be surprised at how weak the US economy is by year end as well.

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[24:58] I think the economy is going to be far weaker in the second half of the year. The fiscal fund and games uh underpinning the consumer. uh the stepped up income tax refunds, that's in the review mirror. The stimulus from the World Cup, that's in the review mirror. You're going to find the second half of the year in the United States, there's going to be a spending vacuum.

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[37:21] Um that's not my expectation. I I think yields have peaked. I think they will come down. I think they'll come down most at the front end of the yield curve. So it'll steepen cuz I think that those rate hike expectations are going to come out. I think in the US we'll revert back to those two rate cut expectations.

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[26:51] the markets are priced for the Bank of Canada still hike interest rates. I think the next move will be to cut, not to hike. Uh at a minimum just stay on hold indefinitely.

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[11:31] but now oil prices look set to level off uh potentially go down. They won't go down to pre-war levels, I don't think. Um, but the inflation from energy has been broken.

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Right now, the market thinks we're going to get rate hikes both in Canada and the US. He doesn't. the market is betting that inflation can go higher. We've had many guests say the same. He thinks we're in for a disinflationary environment.

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[39:30] I do agree with it and I think I I mean I don't have a big inflation view because I think that we are going to be seeing disinflation uh in the service sector uh which dominates the economy but I think we're going to see inflation in the good sector or the product sector uh more broadly speaking

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[30:07] It's hard to say if it breaks the market rally. It It makes me more bullish on bonds than most other people because I think all the concerns about fiscal policy are going to be redressed. Um because I think the fiscal large is going to be I think we're going to have fiscal inertia.

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[27:45] This gravy train, I think, ends in November with the midterms. And it'll be interesting to see what falls out of that because you're right, the fiscal stimulus, six years, uh, that's coming to an end.

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[27:34] tell me what happens after November if uh one of the two chambers goes Democrat and and they probably both will the the House and now the Senate's up for grabs.

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[39:30] Still like gold and the gold miners and I think that we're opening up a very nice uh, um, reopening opportunity um, in gold. I like the hard asset theme.

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[39:30] I'm making a bet on the future of commodity inflation. Just looking at those supply demand curves in the future and what is still going to be in a supply deficit going forward. Um, yeah, 100%. Uh, I'm a big fan of Rare Earth's uh, the base metals uh, energy infrastructure.

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[0:03] I think that this next bare market and it will happen because cycles have not been repealed. Cycles are part of life. But the next bare market is going to hurt a lot more than the other ones that we witnessed in the past six, seven decades.

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[18:26] what we're going to be left with is negative real wage growth which came out of the that that was the main message out of the non-forpe report that came out for May is that once we get the CPI numbers uh for April, we're going to see yet again the second month in a row real wages are contracting and unless the savings rate goes down to zero that's going to lead to negatives in real consumer spending.

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[19:21] I think bonds will be a good place to be. You're not going to make a killing, but I think that uh you'll do fine.

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[34:18] the midterms, there's going to be again, we have so many imbalances, divergences, but you know, politics will play a role in mean reverting some of the stuff we're talking about. Uh because the Democrats are probably there's a good chance that they'll have a clean sweep in the midterms and then we'll see what happens in 2028.

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[18:16] I think that recession risks are higher than most people priced it. And I think the inflation that people are all freaking out about, including the Fed, is going to hit the wall in the labor market.

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[0:20] I think this economy, especially in the second half of the year when a lot of the short-term stimulus falls by the wayside, uh is going to be showing some significant strain.

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[5:35] And I'll tell you right now that a recession is probably off the table uh for the next several quarters uh just from all these spending commitments alone.

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[19:43] I'm watching this thing that tends to move glacially, but I'm looking for a reversal in this one particularly important aggregate that is very complex called the personal savings rate.

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[39:03] I'm not talking about geopolitical tail risks. I'm not talking about that. I'm telling you probably in four weeks I'll turn extremely bullish on what's going to happen with the world. That's my own personal belief.

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[1:54] Silver though looks very dangerous to me. Okay. So, I would just say if you've been longing the trade, either take profits or find a way to hedge your position. I do think we are in a secular bull market uh in commodities and in the precious metals complex. So, this is not to say that the bull market is over. It is to say that we are right for a very significant near-term pullback

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[9:24] So, from now till the 2020 elections, I'm probably bullish on gold.

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[21:26] emerging market bonds uh are looking local currency because the US dollar is in a bare market and that's going to continue

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[12:15] What I'll tell you is data back to 1948 that in an employment slowdown, when non-farm payrolls get to 0.6% year-over-year, you are in a recession 100% of the time. 11 for 11... you could build the assumption that a recession is probably already starting

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[26:52] you're going to ask me what will knock investors off this view that there's no recession next year is if we start printing negative non-farm payrolls month in month out. And we are at the cutting edge right now

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[32:15] So I think 3.75% is a gimme. I think we're going to blow below that in the next 12 months. I wouldn't be surprised if we get into call it a a three to three and a half% range between now and this point next year.

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[32:34] And I think that you're going to find that the much maligned, ignored, despised treasury market is going to be the one market that is going to be delivering equity-like returns over the next 12 months.

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[38:11] I think we're going down to new cycle lows in the US dollar between now and the end of the year.

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[37:21] I think I think let me just add by the way uh the Fed will be scrambling to cut interest rates in the second half of the year

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[18:39] What does the surprise look like in your in your view? surprise looks like u an outright recession. The recession that didn't come in 2022 2023.

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