Hong Kong’s economy and 7.4 million inhabitants are in a state of shock.
Shops are closed, tourism is down, property prices are falling. The streets are filled with rallies, protests, and lately, violence.
It all started more than 200 days ago, on the last day of March. That’s when this wave of rallies against Chinese interference began.
Despite Hong Kong being the world’s third most important financial center, this crisis is barely mentioned in the news.
But its repercussions for markets here in the U.S. could be huge…
Before we get to that, however, it’s important to know how we got here.
Markets have been on a record-breaking streak. This Thursday, the S&P 500, Dow, and Nasdaq were all trading above their all-time highs.
In the last two weeks (or ten trading days), markets have set new all-time closing highs an impressive five times.
But instead of celebrating, some commentators are now sounding the alarm. Markets have gone too high, too fast, they say. This is the peak, and a long fall is next.
But the key indicators that I watch (and history) say otherwise.
Now, it’s only natural to be worried. After all, every downturn can be traced back to a peak (talk about stating the obvious). And 32.2% of consumers are bearish on stocks right now.
That’s more than the 31.7% who are bullish.
But the facts suggest this string of highs is about to continue, at least until the end of the year.
Here are the three reasons why…