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The Stock Markets are a forward looking indicator.
No.
The Stock Markets are an indicator of where investors are putting their money and nothing more.
That is the only thing Stock Markets indicate.
For those of you too timid to take the Stock Market Quiz:
#1: The stock market is setting weekly record-breaking highs continuously for ~18 months. Characterize the state of the US economy (ie, in a recession or growing)
Answer: If you said the economy was performing anything other than a disaster, you're wrong. The Stock Market set weekly record highs during the 1925 Recession, the 1928 Recession and the 1960 Recession and monthly record highs in two other recessions.
Recessions do not cause bad Stock Market performance.
#2 The stock market loses 40.9% of its "value" over a period of 959 days. Characterize the state of the US economy during that period.
Answer: If you didn't characteristic the economy as totally stonking on fire, you're wrong. Average annual GDP growth was 12.5% and quarterly GDP growth ranged from 8.5% to 15% per quarter.
Poor Stock Market performance is not an indicator of a bad economy.
#3 The stock market sets records over a period of 651 days with the DOW doubling in value. Tell us how the economy is doing
.
Answer: That would be the 1960-1961 Recession. Had you panicked when hearing the Media say "recession" and dumped your stocks, you would have lost out. One reason JFK won the 1960 Election is because that was the 3rd recession during Eisencoward's 8 years and people were real tired of recessions.
#4 The stock market loses 45.1% of its "value" over a period of 694 days. How well is the economy doing?
Answer: The economy wasn't on fire, but it was chugging along with quarterly GDP growth rates of 1.5% to 6.0%.
Stock Markets have no bearing on the economy and are not a reflection of the economy because they are separate and independent from the economy.
Only 3% of US businesses sell stocks and they employ 5.6% of the work-force.
Put another way, 97% of US business are prohibited from selling stocks and they employ 94.4% of the work-force.
The Stock Market is an indicator of where investors are putting their money and nothing.
For those people who see anything other than that, they got meds for people who have too many mystical experiences.
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