My readers and I were expecting this.

The S&P 500 index closed above 5,500 last week – and scored a 32nd record this year.

Just as the 18.6-year real estate cycle would predict…

At this stage of the cycle, we are seeing one record after another and another.

Stocks are going up, and they will continue to do so.

That’s what the 18.6-year cycle tells me.

More good news on inflation and interest rates will only keep fueling the rally.

And the numbers are in…

Prepare for This September

June’s inflation rate was lower than expected. On an annualized basis, prices rose by 3% that month compared to the same period last year.

Inflation hit this level for the first time since last June.

And here’s the kicker…

Markets now assign a 100% probability for an interest rate cut in September.

But the news is even better than this…

On a monthly basis, prices fell.

From the Financial Times:

The BLS data also showed that consumer prices fell by 0.1 per cent on a monthly basis, compared with economists’ expectations of a 0.1 per cent increase. It was first time since 2020 that monthly consumer prices had fallen.

Some investors might have missed this… After all, inflation isn’t at the top of people’s minds these days.

They’re busy discussing who is going to be the Democratic contender in this year’s presidential elections.

But the 18.6-year real estate cycle keeps moving.

As my readers know, we are in the “Eleventh Hour” stage of the cycle…

Here’s What’s Going to Happen

The Federal Reserve will most likely cut rates in September.

Markets will soar past their current levels.

We will see more records in equities and other assets, such as gold.

(Gold is seen as a hedge against weakness in the U.S. dollar. Lower interest rates weaken the dollar compared to other currencies and impact the gold price.)

Record levels for gold? Very likely.

Stocks? Almost guaranteed.

This is how the real estate cycle drives the markets.

Steadily and predictably.

But nobody expects it to happen.

From Bloomberg:

For the first time in its history, the S&P 500 closed above 5,500 on Tuesday to extend a blistering 2024 rally that’s left analysts scrambling to update their targets.

Well, color me shocked.

These “analysts” don’t have a clue about how the real economy and the real markets work.

They don’t challenge their orthodoxy. They operate in a box, and that’s why I don’t rely on them for my own forecasts and investment decisions.

The 18.6-year cycle, however, has been an excellent gauge and guide.

And now we have more proof of that than ever.

Regards,

Phil Anderson
Contributing Editor, Inside Wall Street with Nomi Prins