Obviously if it keeps going down, that’s bad. But it looks like it’s at a support level and still much, much higher than it was 5 years ago. (Using SP500 as a proxy for the market at large)
In: Economics
1. Abstract stock market index number doesn’t matter, but stock market movement is an indicator of investors expectations.
2. So a big drop indicates a significant worsening of expectations.
3. It doesn’t mean things will go badly but it is what people expect. Example: stock market drop during covid. Obviously expectation was pretty bad, but it rebounded because feds printer went brrr
What is concerning is the pace that it dropped and how massively the volatility index spiked. It is also concerning that utilities and treasuries have been rallying during this period, which is a classic risk off move that big money does during market downturns.
40 years ago I started a 401k when I quit that job I had 30,000 in it. I rolled it over into a plan in my name and never looked at it, never added anymore money. Most years I never even looked at the statements. I now have over 100.000 in it. If you just put your money some place sensible and don’t touch it, it seems to work.
The US stock market is overvalued and has been frothy for years. It remains to be seen if this is a minor dip or major correction
Many answers are just wrong. This is not a small retraction.
Over the past few months, a handful of stocks are pushing the SP500, mostly AI related. Nvda, for example, has grown almost 200%.
The rest of the stickers were flat or declined. When the market dropped today, those tickers declined further. Tyson food, for example, was $90 before covid and now $60. Ford was $10 in 2020 and still $10 now.
This is very bad for the economy as a whole because AI are the only ones that actually grew but they don’t produce the bread you put on the table, or gas in your car. They also don’t traditionally employ a lot of labors.
It’s not. The market is still up something like 10% year to date
The stock market can’t go up in a straight line forever, and a correction like today is preferable to an actual crash in 18 months
Economic data is weakening but also hasn’t crashed and is still growing
It’s time to start being concerned, but not panicking. The fed needs to be on top of this at their next meeting, but things are nowhere near out of control or crashing
People who are pushing a panic narrative probably have another agenda. Keep in mind we’re in an election year
Your feeling is correct. Markets go up, and markets go down. This is not something to worry about.
Because infinite growth forever is totally not an unrealistic goal, and also not a destructive driver for the entire global economy. Not at all
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