Housing Signals America’s Biggest Recovery — This Is NOT 2008
History shows: The best economic recoveries are led by housing.
And what’s happening today is no exception!
Right now, we’re experiencing unprecedented “economic velocity.”
Simply put, that means money is flowing.
The Fed has infused $4 trillion into our economy. Interest rates are at record lows.
And people are spending.
Homebuilding and home buying are rising as millennials and generation Z are gearing up to push the housing market into an absolute boom.
This is what the Fed should have done in 2008.
Better late than never. And now we have all elements for the greatest recovery in history. A true America 2.0 recovery.
It would be a mistake not to tell you that my signature rebound strategy has just closed nine winning trades last month alone, totaling to 419% in gains. This strategy has racked up gains in many industries — 18 in this year alone. But I truly believe now is the best time to get in. Check out my presentation on my Rebound Profit strategy here.
And watch this week’s Market Talk for the whole story and find out how you can get the rebound gains that are being driven by this recovery’s surge in demand:
Market Talk, May 4, 2020
This week we’ll begin to see major U.S. economic releases for April. As I mentioned in last week’s update, as you hear these releases, please keep in mind that much of the U.S. economy was effectively shut down to flatten the virus curve.
It will be quite understandable to see contractions in the U.S. economic data releases.
The major release which will encompass the full effects of the coronavirus on our economy will be Friday’s jobs report number.
Surveyed economists are expecting an unemployment rate to reach around 16% and possibly as high as 20% in the immediate future. This is a direct reflection of the halt of the U.S. economy to fight the pandemic.
What’s notable is that with this expected jobless rate spike, Bloomberg Economics is forecasting an impressive rebound in the economy after the second half of the year. They are forecasting the employment rate to fall to 10% by yearend and as the steps of the economy continue to take shape.
One of the first steps to sustain reopening is to find a viable medicine to combat the virus. The latest candidate is Gilead’s antiviral drug remdesivir, which just received “lightning fast FDA approval for emergency use.” This antiviral medication, per the government study, shaves about four days off the recovery time for someone hospitalized with the coronavirus. 
It will be made available to patients in early parts of this week according to the company’s CEO. The company has already donated its entire supply of 1.5 million vials to the U.S. government. This will allow between 100,000 to 200,000 treatment courses.
One major U.S. industry champing at the bit to get back open and get back to speed is the residential construction market. The National Association of Homebuilders just sent the White House a list of policy recommendations designed to “help the residential construction industry survive the COVID-19 economic disruption and be a force that leads the U.S. economy out of recession.
NAHB’s proposal falls into several categories, including meeting the short-term needs of the housing industry and increasing housing supply. Those short-term proposals would improve access to the Small Business Administration’s Paycheck Protection Program for single family and multifamily builders and developers.
It would advance the maximum $10,000 amount to all applicants of the SBA Economic Injury Disaster Loan program, ensure the effectiveness of the Federal Reserve’s Main Street lending program for single family and multi family developers and provide direct rental assistance and other solutions to multifamily owners to address lost rental payments.
Also, temporarily increase mortgage limits in high-cost areas for FHA, Fannie Mae and Freddie Mac. As seen in this running list, this plan from the NAHB is part of the Great American Economic Revival Industry Groups, which is a collection of key industry leaders working together to reopen the U.S. economy after the shutdown required by the pandemic.
The list of the companies working together on a collaborative and sustainable reopening includes Cisco, Bank of America, Northrop Grumman, TD Ameritrade, Starbucks, Cigna, Marriott and Tesla.
Automation is More Important Than Ever
You may soon say goodbye to waiting in lines at checkouts in stores. Make way for autonomous checkouts. According to Thomas Industry reports, autonomous checkouts will soon be made easy with ceiling mounted cameras in the stores.
Autonomous checkouts will eliminate lines to create a faster shopping experience, better customer service with staff moved from the checkout counters to the actual shopping floor and also reduce shrinkage. How will customers have to change the way they shop? Per Thomas, the only change is that customers will no longer have to line up to scan their chosen items.
They choose what they want and walk out of the store. They are automatically charged by the retailer’s app or the standard app. The stores will email a receipt once the customer leaves the store. Some stores may still offer the option of paying with cash or a card at a self-service kiosk. Right now, Amazon Go stores are the latest examples of autonomous stores.
The Housing Market Soars
According to Realtor Magazine, mortgages rates have “reached a new record low this past week with the 30-year mortgage rate falling to its lowest average since Freddie Mac began tracking data in 1971.” Per Freddie Mac, the size and depth of the mortgage market is helping to keep rates at record lows.
These rates are driving higher refinance activity and have modestly helped improve purchase demand from the extremely low levels we saw back in April.
From our experience and knowledge, the best recoveries are always led by housing.
These are the lowest interest rates ever which gets to the heart of America 2.0. Coming out of this, this is an America 2.0 recovery.
Low interest rates get to the heart of something that I discussed in my America 2.0 video project, which many of you may have seen. We talk about economic velocity. Low interest rates are a critical element to that. Housing is at the vanguard of that.
As we recover, there is every sign, including in states that are further ahead in terms of recovery, that real estate prices are not crashing. Real estate prices are being held up. Real estate activity is rising. Homebuilding activity is also rising. This is a critical element to the recovery process.
Household formation is the essence of all economic growth in America. Cars and houses and big-ticket items are the things that push our economy forward.
The Greatest Recovery in History is Now
There’s every sign as well that coming out of this, people who don’t have cars will be trying to get into cars because in places like China there has been a collapse in the use of public transportation.
All the pieces are falling perfectly into place for the greatest recovery in our history.
The grandest recovery where we come out bigger, better and where things are being done in a way that goes to the heart of why we focus exclusively on America 2.0 stocks.
There’s been unprecedented action by the Federal Reserve to the tune of $4 trillion. The federal government has passed a stimulus package of $2 trillion. Then we have all of the companies that, put together, has been in the hundreds of billions of dollars in terms of assistance to employees.
This really sets the stage for the greatest recovery.
These are all the things we should have done in 2008. Twelve years later I suppose it’s better late than never. Now we have all the elements for the greatest recovery in history.
We have economic velocity that’s going to come into play. We have extraordinary megatrends of Internet of Things, artificial intelligence, blockchain, precision medicine, new energy, and 3D printing — there is so much going on. Now we have the financial backdrop.
Then we also have two amazing generations of people. The millennial generation is coming of age with rising incomes. Then we have gen Z coming right behind them. They are going to underpin our economy on housing in terms of rising wages and they are also going to cause America 2.0 to keep rising.
From our experience, both as an investor sand an early adopters, we know once you start to use a company it’s very natural, especially for these generations, to ask who makes something and wonder if it’s a publicly traded stock. Then, using this, they go to an app and go buy it.
If you want to get in on these kinds of companies, but make money faster than just owning a stock through the options market, then a lot of these companies did get hit during the panic, but they are starting to recover.
We have a special options service that focuses on rebound price action in the stock market. In other words, once a stock has gotten to its low, there is a rebound that’s driven by a surge in demand that causes these prices to go up. We focus on this using the options market.
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We want to reiterate that we are still bullish, still optimistic, still positive. And we will be cheering America on through this recovery.
Editor, Profits Unlimited
I’ve been investing for more than 25 years. I started my career on Wall Street in 1991 as an assistant portfolio manager at Bankers Trust. I quickly advanced to prominent positions at Deutsche Bank and ING, managing multimillion-dollar accounts. In 2006, the owners of a $6 billion firm named Kinetics Asset Management recruited me to manage their hedge fund.