Related Topics
Stocks , Economy
Share This Page         

Starbucks vs. the Stock Market: A Fascinating Connection

A fascinating connection between the number of coffee shops and stock market trends

by Bob Stokes
Updated: June 22, 2018

It usually takes time to see if a financial, economic or social forecast works out.  After all, we're talking about a broad future trend.

But, let me share with you a forecast that's been an exception to that rule. It's from our April 2018 Elliott Wave Theorist:

The number of coffee shops in the United States will decline substantially.

Now, just two months later, look at this June 20 headline (CBS Moneywatch):

Starbucks to close 150 stores as sales growth cools

In EWI's view, this announcement is just a hint of what's ahead.

You might ask, "What does this have to do with the stock market?" Fair question.

You see, the April Elliott Wave Theorist made that forecast because the dramatic rise in the number of coffee shops that started about 25 years ago is a bull market trend. Starbucks' initial period of expansion began around the same time as the 1990s bull market.

Therefore, it naturally follows that a bear market should bring a dramatic drop in the number of coffee shops.

Indeed, here's a Jan. 28, 2009 New York Times headline, which published more than a year after the start of the 2007-2009 bear market:

Starbucks to Close 300 Stores and Open Fewer New Ones

As you might imagine, the number of coffee shops is by no means the sole stock market indicator. And you could argue that, with Starbucks shops often literally across the street from each other, it may be time to curb the chain’s expansion a bit. But the stock market, as our readers know, is an indicator of social mood – and as such, the timing of Starbucks’ decision is fitting, from a socionomic perspective.

After all, it comes four months after the swift 10% sell-off in stocks back in February, the largest market sell off in nine years.

Indeed, speaking of "caffeine," it appears that the stock market could use some.

Here's what our June 15 U.S. Short Term Update said about the DJIA rally that started in April and stretched up until a week or two ago:

The Short Term Update has discussed the tepid internal strength of the advance …

Just two trading later, on June 19, the DJIA tumbled 287 points. On June 21, investors were handed another triple-digit drop, which was the DJIA's eighth down day in a row.

This is an important juncture to learn why our U.S. Short Term Update editor described the market's recent rebound as occurring on "tepid internal strength."


"Wing it"? That's the Last Thing to Do at This Market Juncture

In other words, dear reader, you need SPECIFIC ANALYSIS AND FORECASTS for the portfolio you've worked so hard to build. Our latest stock market insights will HELP YOU formulate that plan.

Make no mistake: Investors now face RISK ... big-time.

Learn EXACTLY what our Elliott wave experts are telling subscribers, 100% risk-free.

Get the details on how to access what you need to know -- just below ...


Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

Here’s how it works:

 

1

Subscribe now and read the current issues within FFS.


 

2

Fine-tune your portfolio plan.


 

3

Relax. Watch the markets with your targets in mind.




Your Financial Forecast Service Team Helps Put YOU in Control of the Market’s Trends and Turns


Your Financial Forecast Service guides -- three of the best-known market analysts in the world:

  1. 1. Robert Prechter, Author of 16 market-related books, New York Times Best-Selling Author and Editor of Elliott Wave Theorist
  2. 2. Steven Hochberg, Editor of the Short Term Update and Co-editor of The Elliott Wave Financial Forecast
  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

As featured in:



Here's what you get with the Financial Forecast Service


Every Month

At the end of each month, you get a 30-60 day look ahead at the markets. Elliott Wave Financial Forecast lays out expected trends and turns in stocks, gold, USD and bonds.

Three Days Per Week

At market close every Monday, Wednesday, and Friday, you get the Short Term Update, alerting you to what’s changed and what’s upcoming in the next several days.

Latest Research

Every month, Robert Prechter sends you his latest research about waves of social mood in the markets in the Elliott Wave Theorist, so you always know the full picture.


You can be ready for risks and opportunities that catch most investors by surprise


Risk-Free, Start Your Subscription Now

$59

for 1 month of unparalleled market insights