So really a discussion is this going to be another election of “It’s the economy stupid”?
I know the president is not directly in charge of the markets, but policy is what drives them in a lot of cases. We have had an inverted yield curve for over a year and a half now, and all the talking heads were predicting a recession, some a strong one, and yet here we are in one of the longest bull markets of all time.
Lots of reasons that make sense for this, but in the end game, these are the things presidents and candidates run on and lay people eat it up. But it just seems that the Democrats have not been able to correlate this economy, the best in the world post covid, with their administration. I mean I even hear Trump take credit for everything good happening, saying it is just his old policies taking affect, or anticipation of another Trump presidency. How does one combat that with his true believers, taking every win as his own?
Anyway is it going to be an issue close to the top of voters minds this time around? I know it usually kicks in much closer to election time, so the things at the top now are likely to fall down. Most certainly everyone is better off than 4 years ago, but do people actually believe it???
It’s the Fox news effect. People don’t believe what’s right in front of their own eyes if some talking head on Fox tells them it’s a lie.
I saw a NYT headline yesterday, I believe, where 17% of voters think Biden is the one who is responsible for abortion restrictions. We are a nation of dumb asses.
Inflation has much more political impact than the stock market. People experience inflation on a weekly or even daily basis. Many voters don’t have large stock holdings or they’re in some fund that seems rather amorphous/abstract.
I know I should do more research but I can’t help but “assume” most companies are reporting better than expected earnings from them increasing the pricing of their products using an excuse that their expenses have gone up due to inflation. If that were true why are they making huge profits?
I think the biggest part of the inflation “problem” is companies gouging consumers.
If people would stop buying their products they would then have to lower their prices. Of course then their earnings would drop, their stock prices would drop, and now the market is down and then people will complain about that.
Inflation has much more political impact than the stock market. People experience inflation on a weekly or even daily basis. Many voters don’t have large stock holdings or they’re in some fund that seems rather amorphous/abstract.
Spot on
Also most people who have stock positions know the Dow is a crappy index
SPX printed all time high this week as well although survivor bias has to be taken into account
The only stock number that matters is the balance in your PA.
Inflation has much more political impact than the stock market. People experience inflation on a weekly or even daily basis. Many voters don’t have large stock holdings or they’re in some fund that seems rather amorphous/abstract.
There’s also the known psychological effect, sadly, that humans tend to take loss harder than we enjoy success.
There’s also the known psychological effect, sadly, that humans tend to take loss harder than we enjoy success.
Line go up → “I earned this.”
Line go down → “Forces outside of my control stole this from me.”
.
Inflation has much more political impact than the stock market. People experience inflation on a weekly or even daily basis. Many voters don’t have large stock holdings or they’re in some fund that seems rather amorphous/abstract.
Spot on
Also most people who have stock positions know the Dow is a crappy index
SPX printed all time high this week as well although survivor bias has to be taken into account
The only stock number that matters is the balance in your PA.
Oh, you don’t have to pick the Dow. Pick any index. They’re pretty much all around record highs. S&P, NASDAQ, etc.
Oh, you don’t have to pick the Dow. Pick any index. They’re pretty much all around record highs. S&P, NASDAQ, etc.
Only if they’re heavily exposed to US large-caps. Most indices describing ex-US internationals or US small-caps are still down from their 2021 peak.
Granted, US large-caps are a huge fraction of global markets. Currently around 50% of overall world stock market capitalization. So FTSE Global All-Cap is a smidge above its 2021 high, despite so much of its constituency being a mess.
Inflation has much more political impact than the stock market. People experience inflation on a weekly or even daily basis. Many voters don’t have large stock holdings or they’re in some fund that seems rather amorphous/abstract.
people that don’t live on a gated CA property or on a bloated CA pension experience inflation in a much different way than people who do and lamely try to promote the stock market gains as a reflection of “dark brandon”.
when those same people get lied to about whether there is inflation or not, whether it is transitory, whether it is due to the Putin price increase, whether it has peaked and will come down quickly, whether it was 9% or 1.4% when someone took office etc etc they start to resent and question the elites who want to point to the stock market as some measure of “well off ness”
when those same people start getting moved out of housing or asked to cut back on services because you’ve decided to open your border to every Tom Dick and Mary who wants to come in, while lying that that’s not what you are doing, they begin to change their party affiliation to someone who says things they relate to and agree with.
when people who may be enjoying some benefit of the stock market increase realize that, as an administration, your chief economic advisor actually gets on TV and says we got no problems because the govt has the ability to print money… they realize how inept you and your administration really is.
I know I should do more research but I can’t help but “assume” most companies are reporting better than expected earnings from them increasing the pricing of their products using an excuse that their expenses have gone up due to inflation. If that were true why are they making huge profits?
I think the biggest part of the inflation “problem” is companies gouging consumers.
If people would stop buying their products they would then have to lower their prices. Of course then their earnings would drop, their stock prices would drop, and now the market is down and then people will complain about that.
Where is the sweet spot or is there one?
There is a lot in your comment and I’ll touch on two things.
A rising stock market is not necessarily (or solely) because of rising corporate profits. It can also rise because stocks are trading at a high price relative to those profits. There are lots of ways of measuring the ratio of a stock price to corporate earnings. However, by at least some common measures the SP 500 is trading at a high (though not unprecedented) multiple of the earnings. So, that can reflect enthusiasm about future earnings prospects.
There was a recent study on whether companies increased their markups in recent years and it found, with some exceptions, that they didn’t. They were addressing whether higher markups were causing inflation, not your question whether inflation was causing higher markups. Though I think the existence (or not) of higher markups as measured by the study would also be relevant to your question.
Inflation has much more political impact than the stock market. People experience inflation on a weekly or even daily basis. Many voters don’t have large stock holdings or they’re in some fund that seems rather amorphous/abstract.
And any increase in income is due to them and they deserve it. So they fail to recognize that their income the last two years increased faster than inflation.
It’s tough. Plus people refuse to recognize that democrats have been more financially responsible recently as it has been revenue driven.
Oh, you don’t have to pick the Dow. Pick any index. They’re pretty much all around record highs. S&P, NASDAQ, etc.
Only if they’re heavily exposed to US large-caps. Most indices describing ex-US internationals or US small-caps are still down from their 2021 peak.
Granted, US large-caps are a huge fraction of global markets. Currently around 50% of overall world stock market capitalization. So FTSE Global All-Cap is a smidge above its 2021 high, despite so much of its constituency being a mess.
But it’s not dark Brandon’s fault the rest of the G7 is falling behind.
Oh, you don’t have to pick the Dow. Pick any index. They’re pretty much all around record highs. S&P, NASDAQ, etc.
Only if they’re heavily exposed to US large-caps. Most indices describing ex-US internationals or US small-caps are still down from their 2021 peak.
Granted, US large-caps are a huge fraction of global markets. Currently around 50% of overall world stock market capitalization. So FTSE Global All-Cap is a smidge above its 2021 high, despite so much of its constituency being a mess.
But it’s not dark Brandon’s fault the rest of the G7 is falling behind.
Inflation has much more political impact than the stock market. People experience inflation on a weekly or even daily basis. Many voters don’t have large stock holdings or they’re in some fund that seems rather amorphous/abstract.
people that don’t live on a gated CA property or on a bloated CA pension experience inflation in a much different way than people who do and lamely try to promote the stock market gains as a reflection of “dark brandon”.
when those same people get lied to about whether there is inflation or not, whether it is transitory, whether it is due to the Putin price increase, whether it has peaked and will come down quickly, whether it was 9% or 1.4% when someone took office etc etc they start to resent and question the elites who want to point to the stock market as some measure of “well off ness”
when those same people start getting moved out of housing or asked to cut back on services because you’ve decided to open your border to every Tom Dick and Mary who wants to come in, while lying that that’s not what you are doing, they begin to change their party affiliation to someone who says things they relate to and agree with.
when people who may be enjoying some benefit of the stock market increase realize that, as an administration, your chief economic advisor actually gets on TV and says we got no problems because the govt has the ability to print money… they realize how inept you and your administration really is.
You do realize if you cut immigration that inflation goes up? That immigrants are not taking high paying jobs and that studies have shown that immigrants increase native born wages?
It’s tough. Plus people refuse to recognize that democrats have been more financially responsible recently as it has been revenue driven.
You obviously don’t live in Illinois
We are talking about Dark Brandon.
My mom dropped off thank you notes I wrote as a kid to my grand parents. My kids roasted me over them. What I was most embarrassed about was that I was a libertarian as a teen in the late 90s. I provided the Harry Brown views in a pseudo election in HS. His pro legalization stance got me 30% votes.
