Stock market today: Dow crosses 50,000 mark, leading S&P 500, Nasdaq higher as Wall Street rebounds from rout
https://www.yahoo.com/finance/news/live/stock-market-today-dow-crosses-50000-mark-leading-sp-500-nasdaq-higher-as-wall-street-rebounds-from-rout-192439513.html
Posted by helic_vet
3 Comments
Seeing how folks reacted to this minor dip is kind of scary and shows just how much people these days are reliant on asset prices for their financial wellbeing and retirement plans. What’s going to happen when the market is down 25%+ in one year during a correction? We’re nearing 2 decades now of new investors who have never really experienced an actual one yet. And I think that’s being reflected in the amount of uncompensated risk that the market seems to be totally ok with right now — just look at the current multiples.
“But just look at the forward P/E!!” Yeah, that’s just evidence that a bunch of unprecedented growth is already being priced in…
Furthermore, looking just at broad macroeconomic factors, the world population is going to peak in the 2040s and decline from there. Whereas global GDP growth was previously driven both by productivity and workforce gains (especially cheap workforce in developing countries), that’ll have to be fully supplanted and even made up for with solely productivity gains going forward. If AI fails to do what it promises, that could mean that the model of passively relying on GDP growth (and thus growth in equity values) to fund your retirement could be out the window for good.
Basically the entire current model that relies on passive and total stock market performance to grow personal wealth is not equipped to handle global stagnation on the order of decades. Eventually you just run out of people to sell iPhones to.
Goes to show house much people are reliant on asset prices for their financial wellbeing and asset prices……. Kinda goes without saying….. what other option is there?
Growth and innovation will continue even as population growth slows down. The last point I don’t like either. The next “iPhone” hasn’t been produced yet. We are in the infancy of technology still. As long as people have money to buy, they will buy things. We love to consume.
What it is is that people I think are rightfully feeling very nervous, sticker shock, etc. with just…everything going on at the moment, and yet, even with all the job losses, and fewer job openings, on paper it looks like the market has contracted yet the numbers say it hasn’t. Maybe it’ll be a lagging indicator but inflation isn’t as bad as feared, we’re seeing inflation costs being eaten upfront vs being passed to consumers at drastic rates. There’s still a durability in investments, general growth/valuation, and consumer spending.
It feels like everything should be falling apart but it really isn’t yet. It all makes sense, the yo-yoing. It’s emotions vs data.