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Wall Street sell-off turns 'ugly' as US recession fears grow

independent.co.uk

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Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#81

Post by ARandumGuy »

calvinmorrison wrote: post #37
bdcravens wrote: post #13

Earlier quoted context omitted.

It's potentially worse, as it points to a distrust of the system, not individual companies or industries. Presumably we'll bottom out, but unless there's a dramatic change in those policies, prices will reflect the "new normal", not the previous status quo.

so stocks are less related to individual company performance than they should be?

Stocks have always been influenced by stuff outside of company performance. This is why you should look at other metrics to see how successful a company actually is.

Also, companies don't exist in a vacuum. Every US company is impacted by the actions of the federal government. Some companies may be able to come out ahead, but many others will struggle. And predicting which is which is incredibly difficult.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#82

Post by stego-tech »

calvinmorrison wrote: post #37
bdcravens wrote: post #13

Earlier quoted context omitted.

It's potentially worse, as it points to a distrust of the system, not individual companies or industries. Presumably we'll bottom out, but unless there's a dramatic change in those policies, prices will reflect the "new normal", not the previous status quo.

so stocks are less related to individual company performance than they should be?

Stocks in the modern context are little more than speculative instruments - the equivalent of buying a blind bag of chips from a casino and betting they'll increase in value by the time you attempt to redeem them. They rarely correlate to long-term company health anymore, and often correlate to little more than the psychological state of the market at the moment of any given transaction. Remember that prices are a product of trades, not actual valuation, and that those making trades have a vested interest in getting the best possible price by any means necessary - and that since very few people hold a disproportionate amount of total securities, they have outsized influence on those valuations.

It's why I've always been wary of this forced participation in the securities markets the US seems to have. It's forcing folks to gamble at a casino for the chance to retire or grow their earnings, using historical models to support arguments in lieu of actual regulations or guarantees of returns (like dividends, bonds, or interest rates on savings).

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#84

Post by echelon »

DonnyV wrote: post #52
TulliusCicero wrote: post #24

Earlier quoted context omitted.

Wage growth for lower income percentiles has actually been quite good in recent years IIRC.

But they haven't kept up with inflation.

Inflation was totally self-inflicted. Both the Trump 2020 and Biden admins went crazy over stimulus when the worst of Covid had already been behind us.

Pumping that much free energy into the economy cannot be undone with the simple wave of the austerity wand.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#85

Post by SonOfKyuss »

calvinmorrison wrote: post #37
bdcravens wrote: post #13

Earlier quoted context omitted.

It's potentially worse, as it points to a distrust of the system, not individual companies or industries. Presumably we'll bottom out, but unless there's a dramatic change in those policies, prices will reflect the "new normal", not the previous status quo.

so stocks are less related to individual company performance than they should be?

Who’s to say how much the stock price “should” be based on individual company performance, but I think the idea is that individual company performance may be affected by uncertainty in the broader economy. You could also see movement out of stocks in general and into safer investments if the stock market is seen as getting more volatile

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#86

Post by 9283409232 »

I've been operating on the theory since the election, before Trump took office, that Musk and his cabal of billionaires are trying to force a recession so they can buy it all up for pennies on the dollar. Elon Musk directly said "prepare for hardship." Everything that has happened since then has just given me more confidence in my prediction.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#88

Post by AnotherGoodName »

ren_engineer wrote: post #26
cj wrote: post #2

Hopefully this isn't a biased take: I think this is a unique situation because the recent moves (in my opinion) are largely a result of everyone's uncertainty around America's policies. In other words, the recent stock moves aren't because we're seeing a bunch of companies fail to miss quarterly targets. There are no major economic indicators flashing red. If stocks can drop that fast in a couple weeks, they can also…

just cutting government spending would automatically put the US into recession, deficit spending is the only thing that has kept things going. Huge amount of job growth is either direct government hiring or indirect through businesses hiring off revenue from government contracts

The current administration has stated that the deficit spending will increase by this year.

You may have the alternate opinion due to a few million being saved in chainsaw cuts by DOGE but the proposed tax cuts are orders of magnitude higher.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#89

Post by s1artibartfast »

calvinmorrison wrote: post #37
bdcravens wrote: post #13

Earlier quoted context omitted.

It's potentially worse, as it points to a distrust of the system, not individual companies or industries. Presumably we'll bottom out, but unless there's a dramatic change in those policies, prices will reflect the "new normal", not the previous status quo.

so stocks are less related to individual company performance than they should be?

Stocks values are predictions about the future. Past performance is just one factor among many.

There is no "should".

You have hundreds of millions of people predicting the future using different models and heuristics. The future is a moving Target which also depends on what people think about it.

Re: Wall Street sell-off turns 'ugly' as US recession fears grow

#90

Post by skyyler »

riku_iki wrote: post #27
mberning wrote: post #3

To be fair I think this is long overdue. The fundamentals do not support the price of many stocks. Recently Tesla had more market cap than Toyota and many other established brands combined. No way in hell that is believable.

Tesla is way better positioned than Toyota in likely upcoming EV world, so capitalization is result of future expectations.

BYD is also better positioned than Toyota for an upcoming EV world, so there has to be something else going on.
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