By Graham Summers, MBA | Chief Market Strategist
OK, now things are starting to get serious.
As I’ve noted over the past week, while the Fed twiddles its thumbs and frets about the potentially inflationary impact of tariffs, the real economy is rolling over.
The American consumer accounts for 60%-70% of U.S. GDP. The consumer, not the Fed, is what drives the economy. And all signs are beginning to point towards the consumer being “tapped out.”
In the last two weeks, management teams at Southwest Airlines, PepsiCo, Chipotle, and even Walmart have warned that consumers are cutting back on spending. It’s one thing to see one sector of the economy issue a warning. But when you’ve got multiple sectors (airlines, restaurants, consumer discretionary, and retail), all doing this at the same time, you know it’s getting serious.
Well, we can now add McDonalds, the largest fast-food restaurant in the world, to the list of companies issuing major warnings.
Yesterday, McDonalds announced that same-store sales declined 3.6% in the first quarter of 2025. This is the worst quarterly drop since the shutdowns/ PANDEMIC. The company also noted that spending by low-income and middle-income consumers were down nearly DOUBLE DIGITS from a year ago.
Again, this is McDonalds we’re talking about, not a high-end restaurant. And it’s yet another signal that the REAL economy is rolling over right before our eyes. Like I mentioned at the start of this article, things are getting serious.
So where do things go from here?
Most likely in the same way they played out in 2000, 2007 and 2020: the economy will roll over, the Fed will realize it’s WAY behind the curve and start panicking by cutting rates aggressively and printing trillions of dollars in new money to prop up the financial system.
Those investors who are properly positioned for this will make literal fortunes. Those who ignore the warning signs… not so much. You only have to look at what gold and stocks have done in the last month to understand what I mean: there will be MAJOR winners and MAJOR losers in the markets.
The odds of a stock market crash are now higher than at any point since the pandemic.
If you’ve not prepared for this, the time to do so is NOW before this unfolds.
Indeed, our proprietary Crash Trigger is now on red alert. This trigger went off before the 1987 Crash, the Tech Crash, and the 2008 Great Financial Crisis.
We detail this trigger, how it works, and what it’s saying about the market today in a Special Investment Report titled How to Predict a Crash.
Normally this report is only available to our paying clients, but in light of what’s happening in the economy today, we are making just 99 copies available to the general public.
To pick up one of the remaining copies…
Graham Summers, MBA
Chief Market Strategist
Phoenix Capital Research
