The entire reason stocks declined 10% during the war with Iran was the fear of an extended conflict that could lead to Hormuz being closed and oil prices being higher for longer. Stocks more than rebounded to new highs after a cease fire and the belief the US admin couldn't stomach a prolonged conflict and high oil prices.
Over the past few days, the very reason the market initially took a significant dump has mostly been confirmed. Hormuz is likely to be closed for longer than anyone expected back in March. Rising oil, combined with rising treasury yields due to expected inflation, have become a reality.
Yet stocks are mostly unmoved by this new reality. How's this possible? Are stocks really being artificially propped up until Spacex IPOs so that interested parties don't take a massive haircut? What could be the reason the market has all of a sudden chosen to ignore negative factors it once reacted violently to?
And before anyone says tech stocks have great earnings, IWM is still near ATH and it's full of profitless companies that are the most sensitive to high costs and high yields. These are the same stocks that took a massive dive in 2022 over high inflation and yields. Yet they're not behaving the same way as of 3 weeks ago.
Oil and 10Yr at war time highs. Stocks still near ATH. At what point do we acknowledge stocks are being propped for nefarious reasons?
byu/BGID_to_the_moon inStockMarket
Posted by BGID_to_the_moon
8 Comments
So calls?
Midterms
There has been like 5 days of straight sell offs at this point…
Would it make a difference? What is the average person going to be able to do?
It’s not that it’s being propped up, it’s that the market only cares about two earnings calls from now, and doesn’t think oil will matter that much. It did when the war started, but it doesn’t anymore. It saw the earnings come in fine for some companies, and decided to change its perspective. This is actually pretty normal.
All I know is if I was Elon I’d dump that tsla stock in a heartbeat.
Gas prices rose sharply in 2007 and the bottom didnt fall out until 2008. The market does not drop on news of a war. In fact it might rise as government spending increases.
People need to realize that these macroeconomic changes do not impact the market overnight, they take time to take hold.
Yeah it makes no sense. My gas was $4.50 this morning. That’s really high for my area. It had jumped up to that price quite suddenly. $5.00 a gallon seems easily attainable, and soon.
Just curious, how does the space x ipo factor in? I haven’t been paying attention to that. When does it happen?