General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsI Need A Wall Street Guru To Explain This To Me
I am being told that the market is not down because it believes the Iran war won't last long.
We fucking just sent a 3rd carrier group to the ME. 5 ships have passed through Hormuz in the last 24 hours.
Crude oil is a joke, it is flat today, with West Texas dropping slightly.
I think the markets are based on the economy for billionaires, that's what I think.
Billionaires don't give a shit about the price of gas or diesel or anything else, don't give a shit about inflation, don't give a shit about a healthcare system in distress, don't give a shit about Social Security and Medicare tanking.
My explanation makes sense to me, not some BS that the war will be over soon, Iran is busy laying mines in the strait.
Straighten me out.
Smokster
(30 posts)When the majority of the population is living paycheck to paycheck with no "investments" or savings to speak of, not much more evidence is needed that Wall Street is not Main Street.
Now back to the regularly scheduled consumer programming with some Breaking News !!! Target drops prices from a 50% mark up to a 40% markup because Wall Street and Jesus love you. Great Savings coming your way !!! And pay no attention to any supposed shrinkflation rumors. That's all fake news. It's just your eyesight isn't what it used to be dear consumer. Please check out our Target Optical section for another great value and great savings in helping you with that !!!
sop
(18,956 posts)You pretty much straightened it out on your own...
2naSalit
(103,522 posts)Is part of the grand scheme to separate us from our money and treasure because they think they are the only ones who deserve to have anything.
travelingthrulife
(5,412 posts)walkingman
(11,018 posts)don't vote at all? Only about 60% of eligible voters actually vote. And in midterms only about 40%.
republianmushroom
(22,475 posts)BlueTsunami2018
(5,021 posts)Capitalism is the problem, has always been the problem and will always be the problem.
We live in an age that has all the technology, know how and ability to assure every person on the planet has every basic need met and yet we refuse to do it because a tiny minority of assholes has to hoard everything and use the worlds resources for their own benefit.
gab13by13
(32,530 posts)I used to watch Dylan Ratigan religiously. He started doing his show travelling across the country exposing crony capitalism. MSNBC fired him for it. I watched his last goodbye, done in tears.
KPN
(17,455 posts)seeing this I also devcided to look him mup and see what he's doing now. Found this from 2 days ago in case you haven't seen it:
Ratigan is always spot on.
gab13by13
(32,530 posts)Ray Bruns
(6,553 posts)RPM
(5,655 posts)Obviously the war and concomitant inflation (as pertains to peoples' capacity to consume) driven by oil shortages are general market negatives and would, in theory, drive the market down.
Other relevant factors:
- Profits are strong. Generally, that will drive share price positive. How it's strong is beyond me, but earnings can be a lagging indicator. But since profits drive expectation of future profits, the anticipated future profits drives current price (whether the future bears that out...)
- Baseline Interest Rates. All financial models are based on what the risk-free rate (i.e. what the US government can borrow at). The drama at the Fed coupled with the inflationary effects as noted above suggest that the Fed is unlikely to raise rates. Further, Trump's angling at replacing the Fed chair (ostensibly with someone who will be supplicant and possibly DROP rates) likely drives share prices.
- Related to the above, should there be inflationary risk, bonds and cash are the worst possible investments. They pay in fixed dollars, the value of which necessarily is less in real terms as prices increase. On the other hand, real estate and shares can generate profits in future, inflated dollars and are better equipped to deal with inflation.
With the mechanical stuff behind us, there are also psychological drivers:
- Seasonal issues. Spring has sprung, trees are blooming, people are graduating and the general renewal vibe of Spring naturally drives optimism. April is the 2d best month on record for the market, bearing this out. There's an old saying - Sell in May and go away. Spring has historically driven positive markets, barring significant dislocations in the commercial market or society.
- Irrational Exuberance / FOMO. Less trained / disciplined participants in the market may see others doing well and not want to miss the run (timing the market is a fool's errand though). So they're buying when holding / selling may be a better idea.
Trained in Finance and 38 years of investing and I wonder the same as the OP. Have been strongly considering getting out of some (not all - buying and holding solid earnings producing companies is historically safe, correct, and profitable) equities. I'm not convinced of the sustainability of the current prices and have zero confidence in the current government - at least in the US. Have shifted significantly to international weighting lately, but the US can be the stone that drags others down. More than anything, I see the current financial situation of the US government and know, in my heart of hearts, that interest rates WILL go up over the next 5-10 years, making me want to wait to get out of shares and into bonds. But the inflation risks chill me from getting into cash in the time between now and then.
TLDR - its a pretty fucked up market right now.