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re: Can someone explain how the DOW is at 14,000 yet the Sky is falling
Posted on 2/2/13 at 2:30 pm to ThaBigFella
Posted on 2/2/13 at 2:30 pm to ThaBigFella
Because the Stock Market is, at best, only a gross indicator of a particular part of the economy, namely equities.
People buy and hold as part of their retirement planning - this creates a floor of demand, regardless of economic conditions. People don't tend to cash completely out of the stock market, even in bear markets - they just get more choosey (or balance with more securities), and therefore, this provides underlying support for equities as well.
Just off the top of my head as to why the stock market isn't collapsing, despite poor overall economic news.
(Also, energy costs have remained fairly stable, largely due to new technologies and improved fuel efficiency in the modern fleet of automobiles - this is both a drag against inflation, and holds the line on many energy-related business costs.)
People buy and hold as part of their retirement planning - this creates a floor of demand, regardless of economic conditions. People don't tend to cash completely out of the stock market, even in bear markets - they just get more choosey (or balance with more securities), and therefore, this provides underlying support for equities as well.
Just off the top of my head as to why the stock market isn't collapsing, despite poor overall economic news.
(Also, energy costs have remained fairly stable, largely due to new technologies and improved fuel efficiency in the modern fleet of automobiles - this is both a drag against inflation, and holds the line on many energy-related business costs.)
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