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If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
11–20 of 114 posts
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#12I think it's the amazon/meta/google/walmart effect...all$ going to those. The realization setting in that the US economy is increasingly going to be dominated those handful of firms, among others. Unless you own those, you will miss out, hence selling. This is why so many people recommend index funds in order to minizine the likelihood of missing out. Also, retail losing business to Walmart + Amazon and maybe Shopify…
This gets at the issue I see developing sine the 1980s. Pre-1980 much a of small town's economy was dominated by local businesses. Currently I see more money leaving the local economy via subscription. Most historic economic measures aren't that old and economies are not really stagnant. This all compounds into a less generalized economy.
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#13Because a large number of 401k plans are drawing upon stocks so that retired folk can live out their retirement.
The boomers are retiring, and they're the first major group to retire under 401(k) program. They will be selling stocks and bonds (and whatever else they've invested into) and are no longer buying stocks with their end-of-career top-level paychecks.
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#14Inflation and cost of living index. The economy is in a recession.
Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.
https://en.m.wikipedia.org/wiki/Recession
https://ycharts.com/indicators/us_recession_probability
Maybe because the current state implies a higher than normal probability of the US being in a recession? Kinda accounts for the vibes.
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#15Inflation and cost of living index. The economy is in a recession.
Under what definition is the US economy in a recession? People can keep clamoring for it, but the only recession the US is possibly in is a “vibes based” recession.
IMO People have gotten used to the steady growth of the last 15 years, so no growth feels like contraction.
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#16Inflation and cost of living index. The economy is in a recession.
Is that an explanation? I get that if GDP growth is less than inflation, then in real terms the economy is shrinking, even if nominal GDP goes up. But stock prices are in nominal dollars; steady stock prices (or prices increasing at the same rate as GDP) would mean a real decline in value. But explaining why prices for these stocks are falling in nominal terms should involve something about why they would grow slower…
GDP growth is usually quoted in real terms.
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#17This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…
https://ourworldindata.org/grapher/population
The massive growth of the global population is hard for people to grasp, but is a big part of the cost of housing.
Even if we've built billions of new homes in the last century that isn't enough to compensate the bigger still population increase.
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#18Because a large number of 401k plans are drawing upon stocks so that retired folk can live out their retirement. The boomers are retiring, and they're the first major group to retire under 401(k) program. They will be selling stocks and bonds (and whatever else they've invested into) and are no longer buying stocks with their end-of-career top-level paychecks.
Does anyone have an actual breakdown of how much the younger generations are placing away in a 401k - if that's even possible?
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#19This article strongly covers a major SYMPTOM of the problem. https://www.buzzfeed.com/suzystrutner/how-much-you-need-for-... Housing / land valuation is wildly off from the needs of the people. For more than literally my entire life there has been a chronic shortage of housing, with less built than is necessary for multiple decades of time. The issue has compounded. We are at the point where the solution is to litera…
>with less built than is necessary for multiple decades of time.
I thought there was more housing sqft per capita in the US than just about anywhere else? If so it seems more like a distribution problem.
Re: If the Economy Is So Strong, Why Are Consumer Stocks Tanking?
#20Because a large number of 401k plans are drawing upon stocks so that retired folk can live out their retirement. The boomers are retiring, and they're the first major group to retire under 401(k) program. They will be selling stocks and bonds (and whatever else they've invested into) and are no longer buying stocks with their end-of-career top-level paychecks.
So why does this affect mainly consumer stocks?