#StockMarket #Economy #Recession #BullMarket
So, why is the market so bullish while we’re seeing all the signs pointing to a recession? 📈🤔
– Cost of living and housing prices are skyrocketing
– People are losing jobs left and right
– Zombie companies are collapsing
Yet, the market just keeps climbing to new heights. What’s going on here? Can someone please shed some light on this for me?
Here’s what I think could be a part of the answer:
– Central banks injecting massive amounts of liquidity into the system
– Retail investors pouring money into the market
– Tech companies driving the gains
What other reasons do you think could be contributing to this seemingly paradoxical situation? Let’s discuss and try to make sense of it all together! 💬💡
You’re missing the bigger picture.
– unemployment is still low
– inflation persists but ain’t that bad anymore
– companies are making great profits.
You might be buying into media frenzy to much
Inflation down, profits all time high, unemployment down, immigration up. Cost of living crisis is also more accurately an inequality crisis. You also have to realise that housing prices increases means people that are already in the property market are now richer than ever.
Market indicators all show that the economy is running hot.
– Inflation is still high and not coming down easily even with all these rate rises.
– Unemployment is massively low.
– Australia is still posting quarterly GDP growth. It’s not a lot but it’s positive.
Things are good from an economy standpoint. It’s not great if you’re an average consumer due to the reasons you stated but welcome to the disappearance of the middle class. You feeling squeezed and like things are getting harder is a feature of the current system.
High inflation
Unemployment going up, job ads down
Stock market doing poorly
Spending is way down, clothing and furniture have been negative for over a year.
This is purely my opinion not factual or anything
Inflation has slowed down. Jobs wise, last week, US jobs data released showed weakening labour market and that there’s likely going to be rate cuts, boosting the markets flowing to Australia. Housing isnt really an important issue as it only impacts a small minority of the population. Same deal with whatever u said about zombie companies
People have different expectation under a high interest rate economy against a low interest rate one.
When interest rates are low, they hire adult day care style jobs and people who don’t meet the standard lose those jobs as the interest rates rise.
Some companies refuse or can’t identify merit or never actually had any, any combination of this are companies that zombie out and fail.
>Cost of living
Things went backwards, that’s true, but most people have the lived experience to live at a slightly cheaper lifestyle.
>housing are way out of control
This is more of a problem…
Remember when I said refuse to identify merit? Somehow, it’s easier to identify when someone’s between 45 to 60 and has worked at multiple companies across the world. Australian corporate culture does have an intense preference for this sort of cosmopolitanism.
The counter reaction is that we pump the country with migrants who take the jobs that pay enough to afford houses and buy it themselves essentially importing the demand.
And it all begins with that sort of attitude that’s frankly bordering on being bigoted against local Australian applicants.
But yeah, day care jobs.
The market is totally decoupled from reality.
12 months ago it was “out of control / too high” so coming down to normal is even better news than a year ago, no?
We created a lot of money during covid, where else is it meant to sit?
All those things you mentioned are great for listed company profits.
In the short term that is.
Cost of living… inflation is lower
Housing… not much can be done quickly there and wont cause a recession
Losing jobs… yes but employment is still strong.
Zombie companies… Ive no info myself
Market at all time high with expectations of rate cuts.
Things are not too bad but does not mean its a screaming buy either
Given the US is doing better in regards to inflation their market is running harder but we do follow to a degree.
I did read that the Buffet Indicator (market value to GDP ratio) is showing things are peaky in the US market https://currentmarketvaluation.com/
I daresay Warren knows a bit more than anyone here, so perhaps there’s a point to be made.
It wont me sell or stop investing, the market will do as it wants and if you are DCAing or just invested for the long term, just run with it. If in speccy stocks, maybe consider taking profits if concerned.
Financial market is not real economy.
The market and the economy are different things.
People think the economy drives markets. They don’t. Markets drive the economy.
It’s almost as if the ones suffering from the “COL Crisis” aren’t the same ones pumping money into the ASX. Crazy how two things can exist at once, especially when the wealth creators are unaffected by roast chooks going up in price etc
The reality is no one knows wtf is going on or where things are headed. Hope for the best plan for the worst
The thing you are missing is that you are not looking at the actual leading indicators of recession.
You’ll see when a correction comes along.
Markets can remain irrational longer than you can remain solvent
Those things fall between totally irrelevant and barely relevant for company profits, which is what the markets care about, assuming you mean share market. Some of them – cost of living for example or property prices given there are REITS available on the ASX – may even be correlated with higher company profits for particular businesses, and therefore not be any reason to be pessimistic.
Things are not looking very good outside of the Mag7. 35% of all SP500 gain recently is from NVDA. A similar amount of gain is from other big tech – Apple, Microsoft, Meta and Google. The only way market can keep going is if AI can deliver its promise. If investors change their mind on AI, NVDA will lose at least 2/3 of its market cap and bring the index to a more reasonable value.
The markets get very excited about interest rates going down. It looks like we are heading for a shock in China which may lead to a recession but until something “shocking” actually happens markets will keep going up. Have a look at Chinese house prices.
Life and life from media’s hysterical lenses, are two very very different things.
When companies are posting record profits, they will get more investment.
Because it’s priced in.
any business that supplies essentials is making profit IE the ones owned by big companys but everything else that has stock for your hobbies riding, boating etc are all in the worst situation they have ever been in.
so in short economy good for big business & house investors but everyone else is going broke incredibly fast
Two speed economy, big corporations are doing great, boomers have heaps of money from housing, stocks and super.
The interest rates fleeced the most disadvantaged, renters and middle to low income earners with big mortgages and families.
Small business have taken a hit as well in certain discretionary products as disposable income dried up ie rba fleece.
Because the average citizen gets rekt while richer people get even richer
Not an economist, but here is my take.
The measures taken to deflate the economy are almost completely bypassing our largest demographic and biggest spenders, the baby boomers.
The interest rate rises actually benefit the majority of the boomers who are retired and have money in term deposits.
Many are retired without mortgages and investment properties. The rise in rent means they have more money in their pockets and unemployment doesn’t affect them at all. They are continuing to spend, buy property and invest, resulting in bullish markets.
Because people selling things have a vested interest in selling for as much as possible.
The economy is going well. Unemployment is low. Inflation is trending downwards. People are spending. Company profits are high.
Huge demand, out population is growing like crazy.
The type of answers I am seeing in this thread confirms to me once the credit bubble bursts it will be a rude awakening for a lot of people
Rates cut in USA is expected is the basic answer