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As a few people have said, the stock market isn't necessarily the indicator of the entire economy. One other thing to keep in mind is that the Dow Jones Industr
by trcollinson 6y ago
As a few people have said, the stock market isn't necessarily the indicator of the entire economy. One other thing to keep in mind is that the Dow Jones Industrial Average has 30 companies in it. And the S&P 500 has, well, 500 companies. The point is that you are looking at composite indexes of companies on the market, not the entire market. And those companies have access to, what many consider, the largest weapon to help them rise over the next few year. Very very very inexpensive debt through a near 0% interest rate from the Federal Reserve (and other international reserves). Many of the large companies in the world will come out of this stronger than ever. Cheap debt is one of their favorite things to have.
Small business will go under. Keep in mind that a lot of those small businesses were going to go under anyway, this is just speeding up the process and potentially keeping them from getting more debt before they go under.
As for unemployment, many economists believed that our unemployment rate for the last few years was actually too low. Now, it is probably too high. Though we only have a few weeks of that unemployment to measure and this isn't the time for predictions. We need to stabilize the economy then look at the stability of unemployment. An economy this large takes some time to predict. Economists generally don't start making trends with only a few weeks of data.
I have lived through a few of these downturns. This is not the first by any means (2008/2009, 2000, 1987, the 1970's). My historical guess is in 18 months you are going to see unemployment much lower, the stock market will hit new highs, and people will be generally extremely afraid of what happens when the Fed starts to itch to raise the interest rate above 0%. Whichever party is in office in the US will take a lot of credit for "fixing everything" and blame any negative effects (like raising the interest rate, homelessness, income gaps and disparity) on the other party. And a lot of people will think things are wonderful.
The question really is, are they wonderful at that point?