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Stock prices are one of the economic indicators people love to point to, but they're also a pretty bad indicator of how things are going. Firstly, only a small
by bruce511 2y ago
Stock prices are one of the economic indicators people love to point to, but they're also a pretty bad indicator of how things are going.
Firstly, only a small percentage of people are directly invested. A larger group is tangentially invested (through retirement funds) but that isn't applicable in the short term.
Secondly, traders (as distinct from investors) make money on volatility. So there's always short-term movement going on.
For a long time now the market is largely driven by emotion not substance. Big news event, dock of some company drops 5%. By the end of the week it's out the news and back where it started.
So yeah, the market does what the market does. It'll trend upwards, because that's what its designed to do.
There are other, more concerning indicators in play, which are more important than the stock market. Employment (or the loss thereof) has a much more immediate impact. We cheer as tens of thousands are fired. Yay?
- jredwards 2y agoI think the previous poster's point goes beyond that. The argument is that the stock market is going down not because of any standard economic factors, but because of rising uncertainty about US policy. Businesses and investors love stability. They want legal protections and regulations to be predictable. If this downturn is a result of uncertainty about policy, it won't be as easy to turn things around. Particularly if the policies continue to shift every other day.