U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
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Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#2Good news for stocks, it means the Fed will keep printing trillions of dollars.
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#3Given that that Jan and Feb seemed largely fine, the rate of decline in March was probably around 3x the quarter's headline figure -- call it -15%, give or take.
April was much worse, without a doubt. Anything between a -25% and -50% GDP decline seems possible for April.
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#4I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook.
Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#5Good news for stocks, it means the Fed will keep printing trillions of dollars.
In this market good news is neutral and bad news is good.
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#6Thats 4.8% annualized. The real figure is 1.17% for 3 months.
It's quite impressively small really, considering everyone is sitting at home, and many aren't working at all.
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#7I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook. Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?
You will get 100 different answers. I like the argument that inflation is actually high, but our outsourcing of goods that make up the consumer inflation algorithm to cheaper countries makes it seem like inflation is low, but goods that can't be outsourced (education, housing, startup unicorns, financial assets like stocks) were eating the excess inflation that had no other place to go.
So the real value of stocks is lower when adjusted for true inflation, but everyone claims inflation is minuscule / nonexistent so we can pretend that printing trillions of dollars and handing it to banks is having no effect.
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#8I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook. Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?
The list of companies on it should give you an idea: https://en.wikipedia.org/wiki/List_of_S%26P_500_companies
It's mostly companies that do well in any market or have a habit of surviving massive market disruptions. Sort by founded date. Almost all of them are 2000 or older.
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#9I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook. Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?
Stock market is essentially a sentiment graph. There's no need for it to be linked to any underlying useful metric - it's entirely likely people are investing in stocks simply because all other investments are worse.
Re: U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession
#10I understand that the economy and the market are different but I'm so confused. The S&P is up ~12% this month, despite massive unemployment, a shrinking economy, and serious long-term questions about the outlook. Is most of the 12% just market speculation that the virus issue will pass without a long-term earnings hit?
Once all the small businesses close where do you think all the money is going to go?