David Hunter, the head macro strategist at Contrarian Macro Advisors, foresees a significant “melt up” in global markets during the final quarter of 2023. He suggests that this upswing will be fleeting, quickly succeeded by a significant market downturn. Hunter posits that the market highs achieved during this period will not be repeated for a considerable length of time, signifying the end of the 41-year secular bull cycle.
Contrarian Macro Advisors Executive Predicts Q4 2023 Global Market ‘Melt Up,’ Foresees Subsequent 80% Crash
During a conversation with Michelle Makori, Kitco News’ principal anchor and editor-in-chief, David Hunter laid out his predictions. Known for his keen ability to anticipate market trends and economic cycles, Hunter predicts a remarkable 36% rise for the S&P 500, while gold is expected to reach $3,000 per ounce by October. However, he warns that this bullish trend is temporary and a significant market crash and severe recession are looming.
Hunter, in his dialogue with Makori, outlined his projections. “My S&P goal is between six to seven thousand,” he said. “Gold is expected to reach $3,000 and silver $60 before the bust… Most of the ‘melt up’ movement will likely occur by the end of summer, possibly by Labor Day, though it could extend into September.”
Pictured left is Kitco News’ principal anchor Michelle Makori, and on the right is David Hunter, the head macro strategist at Contrarian Macro Advisors.
A melt up, as traditionally defined, is a market phenomenon that often signals a forthcoming market upswing, but these signals are generally seen as deceptive and unreliable. The gains during a melt up are usually met with skepticism, as the overall market fundamentals tend to decline despite the short-term upward momentum. Historically, melt-ups often precede significant market crashes, such as the infamous ‘Fall Melt-Up of 2011,’ fittingly named the ‘Great Surprise.’
Hunter indicates that we are approaching the end of a prominent 41-year secular bull cycle that began in 1982. He emphasized:
The disinflation trend began and interest rates peaked then. I believe we will not see the highs of this bull market again for many years to come.
Throughout the US’s turbulent economic history, significant events such as the infamous ‘Great Depression’ and the daunting ‘Great Recession’ were heralded by melt-ups. These false indicators of market growth enticed investors, leading to overinvestment and extensive borrowing.
Hunter believes the U.S. Federal Reserve’s use of quantitative tightening measures has gone overboard. Economist Steve Hanke shares this view, highlighting similarities between the current monetary tightening and the contractionary policies of the late 1930s. In a recent discussion, Hanke pointed out parallels between today’s situation and historical instances of economic contraction. According to Hunter, “We are in uncharted territory.”
“The recipe is simple: economic instability from the pandemic, plus what could be the biggest policy error in history by central banks [over-tightening], and high leverage,” Hunter commented. “This combination can transform a regular recession into something much worse.”
Hunter explained that the “bust” he envisions will result in an 80% market drawdown. While he predicts gold will reach a record high this year, he expects gold and silver to drop back to current levels. “I don’t anticipate many assets escaping a deflationary bust,” he said. Nonetheless, Hunter believes that gold and silver will rise ten-fold in value after the market bottoms out.
What do you think of David Hunter’s ‘melt up’ prediction followed by a significant market downturn? Please share your views on this topic in the comments section below.
Frequently Asked Questions (FAQs) about David Hunter’s Market Prediction
Who is David Hunter?
David Hunter is the chief macro strategist at Contrarian Macro Advisors. He is renowned for his ability to forecast economic cycles and identify market trends ahead of time.
What is David Hunter’s prediction for global markets in Q4 2023?
David Hunter predicts a significant “melt up” in global markets during the fourth quarter of 2023. This refers to a short-lived, remarkable surge in the markets.
What is expected to follow the predicted ‘melt up’?
Following the predicted ‘melt up’, David Hunter expects a substantial market downturn. He foresees a significant market crash and severe recession.
What does David Hunter say about the future of the bull market?
Hunter suggests that we are nearing the end of a significant 41-year secular bull market that began in 1982. He believes that the market highs reached during this period will not be repeated for many years.
What is a ‘melt up’?
A ‘melt up’ is a market phenomenon that often signals a forthcoming market upswing. However, these signals are typically seen as deceptive and unreliable as they are not based on strong market fundamentals.
How does David Hunter see the role of the U.S. Federal Reserve in the current economic scenario?
Hunter believes that the U.S. Federal Reserve has overstepped with its use of quantitative tightening measures. He suggests that this could be one of the biggest policy errors in history, potentially exacerbating an already fragile economic situation caused by the pandemic.
What does David Hunter predict for gold and silver?
David Hunter predicts that gold will reach an all-time high of $3,000 per ounce this year. However, he anticipates that both gold and silver will drop back to current levels following a predicted market crash. Despite this, he believes that gold and silver will rise significantly in value after the market bottoms out.
More about David Hunter’s Market Prediction
- Contrarian Macro Advisors
- Understanding ‘Melt Up’ in Financial Markets
- The Role of the U.S. Federal Reserve
- Historical Trends in Global Markets
- Understanding Quantitative Tightening