When will the stock market crash? Based upon the latest stock market news showing we are entering a global recession in 2024, we are most likely going to get a stock market crash in 2024. The decline in stocks will start as a stock market correction, before accelerating into a full blow stock market crash by the end of 2024. And the 2024 stock market crash could be even worse than the 2008 Great Financial Crisis. The 2008 stock market crash could pale in comparison to the 2024 stock market crash we are expected to get soon.
As the stock market has continued to rally, most investors are unaware that a global recession has started. And this recession could be worse than the 2008 Great Financial Crisis. I’m Stock Curry. I’m a former Merrill Lynch and Morgan Stanley investment banker, and I’ve been trading for over 25 years. I was working at Merrill Lynch during the 2008 Great Financial Crisis, and I traded during that time period as well, and I survived. In this video, I’m going to show you what’s happening with the global economy. I’m going to show you what’s happening in the US with our economy. I’m also going to show you when the US might enter a recession. And then at the end of the video, we’re going to tie it all together to show you when the stock market is most likely going to start crashing. And yes, it is expected to happen here in 2024.
Over the past few months, the stock market has been rallying over hopes that the Federal Reserve would cut interest rates. And the stock market went up another 3% last week after the Federal Reserve’s dot plot showed that they still expected to do three rate cuts in 2024. But what the market seems to have overlooked is the fact that the Fed dot plot actually shows that half of the Federal Reserve members only expect two rate cuts or less this year. Futures traders are currently pricing in a 35% chance of three rate cuts this year, a 27% chance of four rate cuts this year, and a 22% chance of two rate cuts this year. Now this is extremely bullish compared to what the Federal Reserve is actually predicting. And eventually the market is going to have to correct to get back in line with the Federal Reserve.
And both the Federal Reserve as well as the market is currently predicting the first rate cuts to come in June. That is, of course, if rate cuts come at all in June. There’s only about a 70% chance that the Fed is going to cut in June; there’s a 30% chance they might not. And if you want to place bets on what the Federal Reserve is going to do, there’s a very easy way for you to jump in and make money on the Fed rate cuts, just like I’m doing. All you have to do is open an account with Kalshi, and you can place a bet directly on whether or not the fed is going to cut rates. Right now, there’s a 13% chance that the Fed is going to cut rates in May, and an 87% chance that they’re not going to cut rates in May. If you join me on this trade and you place a bet that, no, the Fed is not going to cut rates in May, it’s going to cost you $0.87 per contract. And if we’re right, we’re going to make $1 per contract. That’s a 14% profit in a little under five weeks. That works out to a more than 100% profit per year. And that is why I love making these trades on KalshiKalshi, deposit $50, and make your first trade to get $15 in free trades.
When the Federal Reserve does start cutting interest rates, it’s going to happen because of one of two reasons. Reason number one would be that inflation is starting to come down, while the overall economy remains strong. And in that case, the Fed will have achieved its first ever soft landing, where the Fed is able to get inflation down without causing a recession. Now, this has never happened before in the history of the United States. The last 16 times the Fed raised interest rates, it caused a recession. All 16 times the Fed has caused a recession – 100% of the times that they’ve raised interest rates. But they believe that this time is different. So if the Fed is able to pull off a miracle and do the first ever soft landing in the history of the United States, then they can start lowering interest rates as inflation comes down.
The second reason the Fed might start to lower interest rates is because they see the unemployment rate start to rise. And as the unemployment rate starts to rise, this indicates that the economy is starting to slip into a recession. And the Federal Reserve will most likely start cutting rates in order to avoid a recession, or at the very least make any upcoming recession more mild.
So now, the first thing that we have to look at is, “Is the Federal Reserve achieving this soft landing? Is inflation coming down?” Unfortunately, it is not. Inflation bottomed out in October of last year, and since then it has been going up every single month, on a month over month basis. Inflation bottomed out in October last year at a 0.1% month over month increase, and then in November and December that jumped to a 0.2% month over month increase, before jumping again in January to 0.3%, and jumping again in February to 0.4%. Unfortunately, inflation is not going down. It’s actually going up. And we’re getting more inflation data on Friday, which is also expected to show inflation continuing to go up on a month over month basis.
Now, it is true that in some parts of the economy the core inflation has started to come down. But it’s that headline inflation that’s actually starting to rise again. And the truth of the matter is, even though the Federal Reserve likes to look at core inflation, they like to remove food and energy from their calculations. The fact is, that it is the full headline inflation that affects US consumers. US consumers are not immune to food and energy prices. So when it comes to how inflation is affecting the US consumer, we really have to look at everything. And there is a one main reason why the overall inflation rate has started to rise again over the past four months. And that is the fact that energy prices have been rising. Surging oil and gasoline may send the energy sector to new all time highs, and commodity prices could get even worse if the Federal Reserve decides to start cutting interest rates. So with inflation continuing to go up, not down, the idea of a soft landing is pretty much thrown out the window, which means the only reason the Federal Reserve might cut interest rates is because it looks like the US is entering a recession.
And right now, the global economy has already started to enter a recession. Four countries are already in a recession. Along with a UK and Japan, Ireland and Finland also went into recessions in the fourth quarter. And many more countries are at risk of slipping into a recession. At least 14 countries witnessed a shrinking GDP during the July to September quarter, and 10 other countries are still at risk of slipping into recession. Fears of a global recession are very real, as 20 countries now are at risk of an economic recession. Most importantly, the countries that got hit the hardest during the 2008 Global Financial crisis are the ones currently in a recession right now. Those countries include Japan, which was one of the first countries to enter a recession during 2008, the UK, Finland and Iceland. Iceland’s economy was almost completely wiped out during the 2008 Global Financial Crisis, and they’re currently seeing a decline of 3.8% in their GDP. So this has already started.
A global recession has already started, it is getting worse, and eventually it’s going to hit the United States. However, it’s not going to hit the United States yet. We still are a little bit off from a recession coming. So let’s take a look at some of the economic data coming out of the United States to see just how close we are to a recession. First, taking a look at the real GDP in the United States, this is GDP minus inflation, what we see is that we did enter a technical recession back in 2022. However, it was not officially declared a recession because the labor market was still strong. And currently US GDP remains very strong as well. So certainly just based upon GDP, the United States is nowhere close to a recession yet. But that does not mean that we are not about to enter a recession in the very near future.
If we look at the Leading Economic Indicators, or LEI, here on the blue line of this chart, what we see is that every single time the LEI drops below zero, a recession starts eventually, usually within about 1 to 2 years after the LEI first drops below zero. This happened in the year 2001. This happened in 2008. It happened in 2020. And the LEI is below zero once again, having dropped below zero in 2022. So based upon the Leading Economic Indicators, this points to a recession coming soon. But the LEI isn’t the only data point that’s showing the US is going to enter a recession soon.
If we look at the Treasury spread between the ten year bond and the three month bill, what we see is that every single time since 1968 that this has fallen below zero, the US has entered a recession. This happened in 1969, 1973, 1979, 1989, 1999, 2007, 2019, and it happened again in 2022. And if we look at the probability of a US recession predicted by that Treasury spread, what we see is that every single time since 1968 that the probability index has risen above 0.28, we have entered a recession. Now, what I most want to point out is that every single time this number has gotten above 0.6, that recession has been especially deep and especially long. You can see that happening during the 1974 recession, the 1982 recession, and once again, we are above 0.6. Meaning if we do get a recession again, then it is expected to be a very long and deep recession, not a mild recession. And that is why any recession we do get could be worse than the 2008 Great Financial Crisis.
So how likely is a recession to occur within the next 12 months? Well based upon the US Recession Probability Index, the likelihood of the US entering a recession within the next 12 months is at 58%, which is the highest it has been in over six years. Now, a lot of people look at the US unemployment rate to show that the economy is still strong, and to indicate that we’re not going to enter a recession. After all, the US unemployment rate remains near the lowest it’s been in over 50 years. However, I’m about to show you a shocking chart that shows that the US unemployment rate is actually predicting a recession to start very soon. Excluding 2020, which was a complete anomaly, let’s look at what happened to the US unemployment rate in 2000 and 2007, prior to the last two recessions.
And what you’re going to notice is that the US unemployment rate made a small rise right before the recession in 2001, and then made a major rise once the recession actually started. Same exact thing happened in 2007. The US unemployment rate made a small rise in 2007, and then skyrocketed in 2008, once the recession actually started. And if we look at what’s happening today, the US unemployment rate is making a small rise again. Every single time the US unemployment rate makes a small rise like it’s currently doing, it has led to a recession. So the fact that the US unemployment rate is rising, even if it’s a small rise, is a huge warning sign that the US is about to enter a recession.
Now this is actually a bigger problem this time than it has been at any other time in the past 40 years. And the reason for that is because the inflation rate is still going up. And what happens when we get an unemployment rate that’s rising at the same time that we have an inflation rate that’s rising? This is called stagflation, and it is the worst case scenario for the US economy. In order to get stagflation, three things must occur all at the same time. We must have slow economic growth, we must have high inflation, and we must have a high unemployment rate. Now, right now we are getting inflation rising, and we’re also getting the unemployment rate rising. The one thing we are not getting yet is a slowdown in our economic growth. Because of that, we are not yet in stagflation. But if the US GDP does slow down and does start to turn negative, then we will have met all three criteria for stagflation. And stagflation is especially bad because it is very difficult to recover from, and it can lead to a long term recession.
Now the bigger question you probably have is, “How does the stock market expect to react to all of this data? If we do get a stock market crash, when is it going to start?” Well, let me show you. If we look at what happened to the stock market in 2007, as well as 2019 and 2020, you will see that the stock market rises and actually increases its rally as it starts to approach a recession. It doesn’t actually start dropping until that recession starts. This happened in 2008, it happened in 2020, and it is happening once again. So the first thing we see is a stock market that tends to rally right up until a recession starts.
But what’s really interesting is that one of the main reasons the stock market is rallying right now, outside of the AI hype, is the fact that the market believes the Federal Reserve is going to start cutting interest rates, and the market is rallying over this. But there is something shocking about the Federal Reserve cutting interest rates that’s actually really bad for the market. If we look at a history of the Federal Reserve’s interest rates, we see that they tend to go flat, and then the Federal Reserve tends to cut rates before a recession starts.
We saw this in the year 2000 when Federal Reserve interest rates went flat, and then a few months before the recession actually started, they started cutting. We saw that again in 2006 and 2007 as interest rates went flat. And then about six months before the recession started, the Federal Reserve started cutting. Saw that again in the year 2019 that the Federal Reserve’s interest rates went flat. And then about a year before the recession started, the Fed started cutting. And now, once again, the Federal Reserve’s interest rates have gone flat. And when they start cutting, that actually indicates that a recession will start about six months after they start cutting.
And if we overlay the Fed’s pivot to the stock market, and we put those two charts together, we see something very concerning. Before the Federal Reserve actually starts to cut interest rates, we see the stock market top out and start going back down. In the year 2001, months before the Fed actually started cutting interest rates, the stock market topped out and started to fall. In the year 2007, right as the Federal Reserve started to cut interest rates, the stock market started to fall. And now the federal Reserve is expected to start cutting interest rates in June, meaning the stock market will most likely start falling in either May or June.
And because the Federal Reserve is expected to start cutting interest rates in June, and because the stock market normally sells off in May, in what is known as “Sell in May and go away”, there is a very good chance that an upcoming stock market crash will start in May – towards the end of May, not necessarily the beginning of May, but starting around that second or third week of May. That is when all of the data is showing that the stock market will most likely top out and start going back down. Then, as the Federal Reserve starts to cut interest rates in June, the stock market should continue to sell off. And then about six months later, sometime at the end of this year or in 2025, we should expect to see that global recession hit the United States, and we should expect to see the United States enter a recession as well. And at that point, we can expect the stock market to start selling off rapidly.
So that is what the data shows for an upcoming stock market crash. Like I said, I survived 2008 and made money. If you want to know everything that we’re buying and selling, and how we’re making money in this market, whether the stock market goes up or down, I post all of my trade alerts and my discord. You can get access to those trade alerts here. And Friday through Sunday – for three days only – you can get 30% off of the discord for life with coupon code EASTER. That’s three days only from Friday through Sunday, get 30% off the discord for life with coupon code EASTER.