The Four Stages of the Business Cycle
The economy fluctuates between growth and contraction in a regular cycle—the business cycle.
Understanding the business cycle, and where we are in it at any given time, is an important aspect when making investment decisions.
Business cycles go through four stages, or phases:
- Expansion
- Peak
- Contraction
- Trough
#gridcaplearn
The economy fluctuates between growth and contraction in a regular cycle—the business cycle.
Understanding the business cycle, and where we are in it at any given time, is an important aspect when making investment decisions.
Business cycles go through four stages, or phases:
- Expansion
- Peak
- Contraction
- Trough
#gridcaplearn
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The economy is currently at the bottom. All key indicators point to this.
The Federal Reserve interest rate is currently ~5.33%, and the price of gold has reached its historical maximum in the last 30 years.
Short-term bond yields are currently higher than long-term ones. As of April 25, 2024, the yield on the 3-month Treasury bill was 5.47%, while it was 4.70% for the 10-year U.S. Inflation rate stands at 3.5%, and the unemployment rate in the US is 3.9%. In March 2024, the Industrial Production Index (IPI) reached a value of 102.7 in the United States.
Therefore, we can confidently say that the US economy, and consequently the global economy, is currently at the bottom of the economic cycle.
#gridcapnews
The Federal Reserve interest rate is currently ~5.33%, and the price of gold has reached its historical maximum in the last 30 years.
Short-term bond yields are currently higher than long-term ones. As of April 25, 2024, the yield on the 3-month Treasury bill was 5.47%, while it was 4.70% for the 10-year U.S. Inflation rate stands at 3.5%, and the unemployment rate in the US is 3.9%. In March 2024, the Industrial Production Index (IPI) reached a value of 102.7 in the United States.
Therefore, we can confidently say that the US economy, and consequently the global economy, is currently at the bottom of the economic cycle.
#gridcapnews
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The price of gold per ounce today is $2348.24.
We are currently experiencing an economic crisis.
Over the past 30 years, the minimum price of gold has been $252.57, and the maximum has been $2389.98. So, gold is currently almost at its peak price.
What could this mean? People are afraid to invest due to the unstable economy. They have turned to the most reliable source of preserving their wealth - gold. That's why we see such a high price.
The situation is different with oil. The price per barrel is $83.24. The maximum was observed in 2008 - $145.31, and the minimum in 2020 - $11.26. So, regarding oil, we are currently approximately in the middle between its extremes.
#gridcapmacro
We are currently experiencing an economic crisis.
Over the past 30 years, the minimum price of gold has been $252.57, and the maximum has been $2389.98. So, gold is currently almost at its peak price.
What could this mean? People are afraid to invest due to the unstable economy. They have turned to the most reliable source of preserving their wealth - gold. That's why we see such a high price.
The situation is different with oil. The price per barrel is $83.24. The maximum was observed in 2008 - $145.31, and the minimum in 2020 - $11.26. So, regarding oil, we are currently approximately in the middle between its extremes.
#gridcapmacro
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What will happen this week: news from the world of finance.
The first important release will be the PPI report, which will come out later today.
Although it usually doesn't make waves, today's publication may have a greater impact than usual. This is considering how the markets have been waiting and tensing up over the past week or so.
On Wednesday, May 15th, the Core inflation rate MoM (Month over Month) is forecasted to be 0.3%, while the previous figure was 0.4%. Core inflation rate YoY (Year over Year) is forecasted to be 3.6%, with the previous figure at 3.8%.
Also, on Thursday, May 16th, there will be a 4-Week Bill Auction with a previous rate of 5.27% and an 8-Week Bill Auction with a previous rate of 5.275%.
#gridcapweek
The first important release will be the PPI report, which will come out later today.
Although it usually doesn't make waves, today's publication may have a greater impact than usual. This is considering how the markets have been waiting and tensing up over the past week or so.
On Wednesday, May 15th, the Core inflation rate MoM (Month over Month) is forecasted to be 0.3%, while the previous figure was 0.4%. Core inflation rate YoY (Year over Year) is forecasted to be 3.6%, with the previous figure at 3.8%.
Also, on Thursday, May 16th, there will be a 4-Week Bill Auction with a previous rate of 5.27% and an 8-Week Bill Auction with a previous rate of 5.275%.
#gridcapweek
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Week 2. Portfolio Presentation.
Our portfolio is divided into 4 categories based on industry type. Read on to see which stocks we are monitoring.
1. Growth Industry: We are interested in stocks such as NVIDIA Corp, Halliburton Co, Apple Inc, Nu Holdings Ltd. In growing industries, you can invest at any stage of the economic cycle, so don't hesitate and confidently buy stocks of such companies.
2. Cyclical Industry: We are tracking General Motors Co, Delta Air Lines Inc, Chevron Corp. Since the fortunes of these companies directly depend on the overall state of the economy, we currently do not recommend investing in these stocks.
3. Noncyclical (defensive) Industry: We highly recommend investing in Walmart Inc.
4. The last category: high dividends. Here we are monitoring Diamondback Energy Inc, Chevron Corp, Devon Energy Corp. We are not currently buying stocks of these companies, but we are actively monitoring them.
Stay tuned for our updates - we'll teach you how to invest.
#gridcapinvest
Our portfolio is divided into 4 categories based on industry type. Read on to see which stocks we are monitoring.
1. Growth Industry: We are interested in stocks such as NVIDIA Corp, Halliburton Co, Apple Inc, Nu Holdings Ltd. In growing industries, you can invest at any stage of the economic cycle, so don't hesitate and confidently buy stocks of such companies.
2. Cyclical Industry: We are tracking General Motors Co, Delta Air Lines Inc, Chevron Corp. Since the fortunes of these companies directly depend on the overall state of the economy, we currently do not recommend investing in these stocks.
3. Noncyclical (defensive) Industry: We highly recommend investing in Walmart Inc.
4. The last category: high dividends. Here we are monitoring Diamondback Energy Inc, Chevron Corp, Devon Energy Corp. We are not currently buying stocks of these companies, but we are actively monitoring them.
Stay tuned for our updates - we'll teach you how to invest.
#gridcapinvest
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More positive: Signs of a slowdown! Inflation and retail sales data suggest the economy is cooling down.
After months of rising prices, inflation showed signs of slowing in April's Consumer Price Index (CPI). This is a relief after worries that inflation might pick up again.
Experts say: "This is a welcome surprise & eases concerns about inflation rising again," says Seema Shah, an investment strategist.
By the numbers: Inflation rose 3.4% year-over-year in April, down from 3.5% the month before. Core CPI (excluding food & energy) also rose slightly slower than March. Still, it's above the Fed's 2% target.
The data likely won't lead to immediate rate cuts, but if these trends hold, September cuts could be on the table. Retail sales also point to a cooling economy - they were flat in April.
#gridcapnews
After months of rising prices, inflation showed signs of slowing in April's Consumer Price Index (CPI). This is a relief after worries that inflation might pick up again.
Experts say: "This is a welcome surprise & eases concerns about inflation rising again," says Seema Shah, an investment strategist.
By the numbers: Inflation rose 3.4% year-over-year in April, down from 3.5% the month before. Core CPI (excluding food & energy) also rose slightly slower than March. Still, it's above the Fed's 2% target.
The data likely won't lead to immediate rate cuts, but if these trends hold, September cuts could be on the table. Retail sales also point to a cooling economy - they were flat in April.
#gridcapnews
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The market went up.
If we look at the S&P 500 index chart over the past month, we see a steady increase from $4,967.23 on April 19 to $5,303.27, which we observe today.
The economy is starting to revive.
#gridcapmacro
If we look at the S&P 500 index chart over the past month, we see a steady increase from $4,967.23 on April 19 to $5,303.27, which we observe today.
The economy is starting to revive.
#gridcapmacro
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Since the benign US CPI report last week, the USD has been generally under pressure as hawkish expectations subsided and the market shifted its focus from inflation to growth. This shift triggered positive risk sentiment, leading to gains in risk assets such as stocks and bitcoin.
Typically, such an environment is unfavorable for the greenback and favorable for commodity currencies like the NZD.
#gridcapnews
Typically, such an environment is unfavorable for the greenback and favorable for commodity currencies like the NZD.
#gridcapnews
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GC Portfolio: What to Buy
One of the stocks we decided to acquire for our portfolio is WMT (Walmart Inc).
Having purchased them in April for $250, we already have a profit of $23.2 (9.28%). The company has shown decent growth, and we are confident it will continue to grow in the future.
#gridcapinvest
One of the stocks we decided to acquire for our portfolio is WMT (Walmart Inc).
Having purchased them in April for $250, we already have a profit of $23.2 (9.28%). The company has shown decent growth, and we are confident it will continue to grow in the future.
#gridcapinvest
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NASDAQ is one of the important indexes to keep an eye on.
We can note that its value has shown good growth over the past month: from $15,927 it has risen to $16,920 (+6.23%).
The economy is starting to revive.
#gridcapmacro
We can note that its value has shown good growth over the past month: from $15,927 it has risen to $16,920 (+6.23%).
The economy is starting to revive.
#gridcapmacro
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Stock prices will continue to rise!
The US Treasury will launch a buyback program starting May 29th. About $2 billion will be injected into the economy each week.
In such situations, money has always flowed actively into the stock market. Therefore, stocks will rise.
#gridcapnews
The US Treasury will launch a buyback program starting May 29th. About $2 billion will be injected into the economy each week.
In such situations, money has always flowed actively into the stock market. Therefore, stocks will rise.
#gridcapnews
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