A series of unsettling trends from soaring debt to falling spending suggest a U.S. stock market crash in 2015 looks increasingly likely.
Lately the six-year bull market has been looking tired. Despite a lot of volatility, stocks overall are flat on the year.
Meanwhile, the Dow Jones Industrial Average and the Standard & Poor's 500 are both within 3% of their all-time highs.
The question is whether the markets are taking a breather before moving on to new highs or whether they're just out of breath.
The big picture trends say this market is sucking wind.
For investors, the strong possibility of a U.S. stock market crash in 2015 calls for an adjustment in strategy. At minimum investors should choose stocks in "must-have" businesses instead of "nice-to-have" businesses. And they must remember to use trailing stops.
The problem equities are starting to have – and the reason a U.S. stock market crash may loom on the horizon – is that there's not enough money around to push stock prices higher.
Not so much the money to buy stocks. There always seems to be plenty of that. But value is driven by profits, which requires sales. And Americans don't have as much money to spend as they used to.
These charts illustrate what I'm talking about…
7 Charts Show the Case for U.S. Stock Market Crash 2015
U.S. Stock Market Crash 2015, Chart No. 1: People Are Holding on to Their Money
First, let's look at the velocity of money. That's simply how quickly money gets spent once acquired. Over the past two decades, the velocity of money has steadily declined.
That tells us that people have become less and less willing to spend their money. This makes sense during a recession. People often get anxious they won't have enough money, so they're more reluctant to part with it.
Bu this trend hardly slowed after the last recession. Nervous about the economy, Americans have not returned to their spending ways.
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.