Something is off in the market. There’s no sugarcoating it. As liquidity hits a low point, with household non-equity liquidity finishing 2024 near historic lows, the ripple effects are being felt in ways that should have investors on edge. This isn’t just another data point. It’s a flashing red warning sign. Liquidity drives stock market returns—simple as that. So, when liquidity dries up, you can bet the market is in for a rough ride. This is not just about numbers on a page. It’s about what those numbers mean for everyday Americans and the economy as a whole.
Looking at job postings on platforms like Indeed, which are typically a reliable leading indicator for the Job Openings and Labor Turnover Survey (JOLTS), things aren’t looking good. The numbers are dropping, and not just a little—we’re now at a four-year low. That’s a big deal. A declining job market leads to less consumer confidence, and less consumer confidence means less spending, which means… you guessed it, a downturn in the economy. It’s all connected, and the signs are getting more and more obvious. It’s not just a bump in the road. The trend is downward, and it’s heading for trouble.
The NFIB Small Business Optimism Index is also taking a hit. February’s numbers were bleak, dropping 2.1 points to 100.7, marking the second consecutive month of decline. This is huge because small businesses are the backbone of the American economy, and when their confidence falters, the entire economic engine starts to sputter. Only 37% of business owners are expecting economic improvement—and that number is telling. If small business owners, who are usually the most optimistic about growth, are this pessimistic, then the broader economy is facing serious headwinds.
But that’s not all. It seems like the general public is also starting to catch on. More than half of Americans now believe a market crash is on the horizon. This shift in sentiment is critical. When the general public starts expecting a market crash, it often becomes a self-fulfilling prophecy. The fear sets in, people start pulling back their investments, and the market reacts accordingly. We could be seeing the beginnings of a major downturn.
And here’s the kicker—foreign travel to the U.S. is projected to decline 5.1% in 2025 compared to 2024. This is insane. It’s something that could have serious consequences for the domestic airline, hotel, and even Airbnb industries. Tourism is a massive part of the U.S. economy, and when foreign visitors stop coming, it creates ripples that spread far and wide. Airlines and hotels will see a decline in bookings, and businesses that rely on international tourism will struggle.
The consequences of this trend are far-reaching. This isn’t just an issue for the travel industry—it’s a sign of broader economic problems. When people stop traveling, it signals a loss of confidence in the U.S. economy. The U.S. depends on foreign spending to support various sectors, and if that spending dries up, the fallout will be substantial. So, the question is—how long can this decline continue before the damage becomes too much to bear?
Sources:
https://x.com/WillieDelwiche/status/1904701594186154444
https://x.com/i3_invest/status/1905016921700913317
https://x.com/XavierComelli/status/1902005822105739378