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re: Why is the stock market rallying right now?
Posted on 2/25/24 at 9:26 am to slackster
Posted on 2/25/24 at 9:26 am to slackster
quote:Speaking of recessions, the Conference Board finally abandoned its US recession warning that it issued in July 2022. The senior manager of its business cycle indicators said last week:
Here’s something though…
quote:
While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its 10 components were positive contributors over the past six-month period. As a result, the leading index currently does not signal recession ahead.
It's also interesting how Japan entered a recession at the end of last year, but the Nikkei 225 just recovered from its 34 year bubble burst in 1989.
More fodder for the "economy and stock market are related, but not the same" file.
1
Posted on 2/25/24 at 10:02 am to SulphursFinest
I also think people today understand the stock market better than in the past due to the internet.
As a whole if you leave money there it will grow over time. I think the days of huge panicking sell offs are behind us barring a major economic collapse that sinks several major banks, investment groups and blue chip companies.
As a whole if you leave money there it will grow over time. I think the days of huge panicking sell offs are behind us barring a major economic collapse that sinks several major banks, investment groups and blue chip companies.
Posted on 2/25/24 at 11:46 am to deltaland
I can’t speak for the stock market. Inflation is still high from considering wage growth the past few years.
Most on this board are good with money hence why they post here. The overall economy for middle class families is pretty bad right now. Rent is high, housing is high, grocery bills are up, travel is expensive etc.
Most on this board are good with money hence why they post here. The overall economy for middle class families is pretty bad right now. Rent is high, housing is high, grocery bills are up, travel is expensive etc.
Posted on 2/25/24 at 12:26 pm to cajuntiger1010
quote:
The overall economy for middle class families is pretty bad right now.
When was it good in your opinion?
Posted on 2/25/24 at 12:44 pm to UltimaParadox
Question for you guys with much higher financial literacy than myself….what is the significance of the relationship between inflation and the growth of the stock market?
Seems like the general market has done well but wouldn’t it be productive to judge it relative to the cost of living for the average American. For instance, if the market increases at 100% but the cost of housing, food, transportation, insurance, etc. increases at 110% wouldn’t that be a net negative?
Is this too simplistic a representation of what’s going on? Genuinely asking here
Seems like the general market has done well but wouldn’t it be productive to judge it relative to the cost of living for the average American. For instance, if the market increases at 100% but the cost of housing, food, transportation, insurance, etc. increases at 110% wouldn’t that be a net negative?
Is this too simplistic a representation of what’s going on? Genuinely asking here
Posted on 2/25/24 at 12:46 pm to UltimaParadox
quote:
When was it good in your opinion?
1946-1970
Posted on 2/25/24 at 1:58 pm to hall59tiger
quote:
Seems like the general market has done well but wouldn’t it be productive to judge it relative to the cost of living for the average American. For instance, if the market increases at 100% but the cost of housing, food, transportation, insurance, etc. increases at 110% wouldn’t that be a net negative? Is this too simplistic a representation of what’s going on? Genuinely asking here
You are correct that real returns are more accurate of reality than nominal returns.
But the market has also had decently positive real returns over the past few years. Not great, but still positive. Assuming 2024 continues as it has so far, real returns should be pretty damn good over the 4 years to that point
Posted on 2/25/24 at 2:29 pm to JohnnyKilroy
quote:
You are correct that real returns are more accurate of reality than nominal returns.
I gotcha. I appreciate the explanation. So “real returns” is the term used to describe what I was talking about? It’s wild how nuanced all of this financial stuff can be.
Posted on 2/25/24 at 11:17 pm to hall59tiger
quote:
gotcha. I appreciate the explanation. So “real returns” is the term used to describe what I was talking about? It’s wild how nuanced all of this financial stuff can be.
Historical returns for the S&P500 over the last 30 years is around 10%. If you adjust for inflation it's a little over 6%
Posted on 2/26/24 at 9:24 am to UltimaParadox
quote:
If you adjust for inflation it's a little over 6%
Makes sense. Forgive my ignorance but is all inflation created equal? Is there a term for the type of inflation that would be relevant to someone in the middle class (transportation, food, housing, insurance)?
Posted on 2/26/24 at 11:38 am to bayou choupique
"The stock market" has been hammered on and off for the passed two years. Big tech included. But the earnings scorecard for the S&P is looking healthy:
Small caps aren't looking very pretty but the numbers are improving as more companies report:
In addition the layoffs improve earnings and margins and they aren't firing the people who purchase equity funds without indiscriminantly.
Small caps aren't looking very pretty but the numbers are improving as more companies report:
In addition the layoffs improve earnings and margins and they aren't firing the people who purchase equity funds without indiscriminantly.
Posted on 2/26/24 at 12:33 pm to JohnnyKilroy
quote:
He also wanted to use various points in early/mid 2020 as a baseline of what oil/gasoline should be, price wise.
Such people are so brainwashed by certain politicians they can’t even understand simple supply and demand economics and how governments shutting down travel and commerce crashed fossil fuel demand.
They can be seen posting that meme of gasoline being $1.49/gallon at Walmart during the Spring of 2020, but it never dawns on them why that meme also doesn’t show the national unemployment rate at that same time period.
Posted on 2/26/24 at 1:24 pm to RoyalWe
quote:
While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its 10 components were positive contributors over the past six-month period. As a result, the leading index currently does not signal recession ahead.
I'm not sure how that isn't at least concerning to some. The last time we had a disparity with LEI being so far below Real GDP to this extent and for this long was the Great Recession. Consumer debt being so high with such high interest rates while real wages are barely moving does not exactly scream "this is a strong and stable economy".
Posted on 2/26/24 at 1:38 pm to ragincajun03
quote:
Such people are so brainwashed by certain politicians they can’t even understand simple supply and demand economics and how governments shutting down travel and commerce crashed fossil fuel demand.
This is true. People will blame hedgefunds and real estate agents for "driving up the market" but omit that the reason it went banasas were 2% mortgage rates and like 2.5-3% investmenet rates.
Posted on 2/26/24 at 9:41 pm to bayou choupique
To all the cash on the sideline…
Posted on 2/27/24 at 12:01 am to The Torch
quote:
hey are manipulating things to prop Joe up.
Anyone that stays on X knows all about this. There has been some really good data driven tweets the last few weeks about how they are accomplishing this all time high while most stocks are down over 50% since Biden took office. It’s pretty fascinating how bad the market actually is at the moment but people are being tricked into thinking it’s doing well. When the other shoe drops it’s gonna be scary bad.
Posted on 2/27/24 at 12:06 am to LaBornNRaised
quote:
Anyone that stays on X knows all about this. There has been some really good data driven tweets the last few weeks about how they are accomplishing this all time high while most stocks are down over 50% since Biden took office. It’s pretty fascinating how bad the market actually is at the moment but people are being tricked into thinking it’s doing well. When the other shoe drops it’s gonna be scary bad.
Not sure if serious.
Posted on 2/27/24 at 5:35 am to LaBornNRaised
quote:
Anyone that stays on X knows all about this.
Damn. So all I need to do is get a tweeter account and I’ll have all the real economic and market news?
Posted on 2/27/24 at 6:03 am to SulphursFinest
quote:
What I don’t understand even more is the older guys at work telling me they can’t retire because Biden crashed their 401ks
Over the past several years they've likely transitioned to bonds and some high yield dividend equities and have been lapped by the sp500 (or more specially the 10 of so tech stocks that have propelled the growth).
Posted on 2/27/24 at 8:23 am to LaBornNRaised
Yea, X is where you should get financial analysis. Lol.
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