Comment by AnotherGoodName

It's very very easy to make stocks go up. Zimbabwe and Venezuela have stock markets that have gone up millions of times over for instance. The stock market is mostly just an inverse of currency health and tends to be inline or slightly above inflation on average, even when the economy is a complete mess.

No one ever judges economic health by the stock market which you seem to be doing. You judge it be things like median wealth (currently below 2007 levels in the USA) and employment figures.

rsanek 4 days ago

You can use non-USD currencies to judge how the US stock market has fared to avoid the issues with currency health. You may argue that dollar-denominated returns aren't real, but SPY isn't down even when denominated in EUR https://ycharts.com/indices/%5ESPXEUR

>median wealth (currently below 2007 levels in the USA)

This is outdated -- it surpassed 2007 levels in 2022. https://www.federalreserve.gov/econres/scf/dataviz/scf/table...

Reply View 1 reply

hypeatei 4 days ago

> SPY isn't down even when denominated in EUR
*SPX and no, it's down 2% when denominated in Euros while up 15% when denominated in dollars. I wouldn't say the USD has fared well so far.

Reply View | 0 replies

derf_ 4 days ago

> The stock market is mostly just an inverse of currency health and tends to be inline or slightly above inflation on average...

This is demonstrably false? Long-term average US inflation since 1913 is 3.1% [0]. Long-term nominal average US stock returns since 1928 are 9.94% [1]. A nearly 7% advantage compounded every year for roughly a century is not "slightly above", it is absolutely enormous. Over 60,000% enormous.

Furthermore, when inflation is high, interest rates go up, and interest rates act like gravity on stock prices. See any number of Warren Buffett shareholder letters. See also: the year 2022. Stock market returns are mildly negatively correlated with inflation (with a coefficient of -0.229 [2]).

[0] https://inflationdata.com/Inflation/Inflation_Rate/Long_Term...

[1] https://awealthofcommonsense.com/2025/01/historical-returns-...

[2] https://www.forbes.com/sites/rmiller/2024/06/20/90-years-of-...

Reply View 2 replies

AnotherGoodName 4 days ago

For rate rises that are enacted to slow inflation (which slows stock market growth as you said) i think you have the cause and effect reversed.
The best way to see how inflation and stocks are linked is to look at economies where inflation is not intentionally slowed by rate rises. The stocks go up more or less with inflation (and some small % of gains they may have on top as you say). When you have rate rises that slow inflation you do indeed slow stock growth. But this is also inline with the link between inflation and stock price.

Reply View | 1 reply
- caminante 4 days ago
  
  I thought you were joking with you earlier comments.
  > The stock market is mostly just an inverse of currency health
  > The stock market [] tends to be inline or slightly above inflation on average
  Now, you're saying the following, when there's no strong positive link.
  > The stocks go up more or less with inflation
  
  Reply View | 0 replies

hypeatei 4 days ago

> and employment figures

Just to add onto your point, bad employment numbers can actually be bullish for stocks due to a higher chance of Fed rate cuts. Obviously there is a threshold there because if too many people are unemployed then no one can buy stuff, but it just highlights how disconnected stocks are from the economy.

Reply View 0 replies

sejje 4 days ago

> No one ever judges economic health by the stock market which you seem to be doing

On the news stations they do, and it was a bunch of FUD about the stock markets tanking.

Tesla, too. "Look what he's done to his brand, let's hit him in the wallet" blah blah.

That was while things were in a downtrend. It was going to be the biggest recession ever, Trump was so stupid he couldn't possibly understand the ramifications, etc.

Then it just never happened. Things went up.

Reply View 1 reply

hypeatei 4 days ago

The initial dip was bought up by retail investors then everyone realized TACO (Trump always chickens out) so the markets don't really care about tariff threats anymore.
What benefit have we gotten from the chaotic tariff policy? Any trade deals?

Reply View | 0 replies