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Same with the stock market completly decoupled from the real economy. It's a wealthy index, there could be a real recession and the stock market still would go
by fHr 1y ago
Same with the stock market completly decoupled from the real economy. It's a wealthy index, there could be a real recession and the stock market still would go up.
- wnc3141 1y agoStock market measures two things, 1) the performance of firms within their economic environments. 2) the level of savings to be invested in the stock market. Both are tied to the labor-share of income. That is, how much income is generated through yield on capital (firm profits returned to shareholders, rents, financial services) compared to earned through labor. This chart inversely correlates nicely with the stock market. https://fred.stlouisfed.org/series/W270RE1A156NBEA https://fred.stlouisfed.org/series/W270RE1A156NBEA