Unemployment and inflation are up, yet the market stays high

[Chasstev365]

I think the market is being artifically inflated and we are quickly heading for a fall.

[Scrivener7]

1. I just saw that. It's crazy.

[Johonny]

2. People are shifting money in anticipation of rates

With a rate cut likely this month now, and more cuts possible before the end of the year.

[gab13by13]

3. Exactly,

[Johnny2X2X]

4. The markets aren't the economy

Never been a bigger disconnect. We have 2 classes of people, laborers and investors. And the people at the tail end of their working lives are desperately trying to join the investor class.

But eventually, people stop spending, and earnings take a hit along with stock prices. In fact, companies cutting staff right now is probably what's propping up some of their stock value.

[newdeal2]

9. Krugman had a good analogy about this

The market is basically Wile E Coyote and it doesn’t notice that it’s running out of runway until it’s too late.

[Johnny2X2X]

14. Well, they've stopped hiring

And there were more layoffs last month than any month since Covid in 2020. So businesses are seeing trouble and cutting staff because of it.

Of course, no worry if you lose your job, Trump's new BLS chief is going to tell us 100% of people are employed and the economy is producing 800,000 jobs every month. That's really going to comfort the millions of families standing in soup lines daily.

What's absolutely insane is that Republicans know Trump is a total disaster for the economy, his policies go against 100 years of Republican ideals, but it's a cult, and they're following him off the cliff.

[NewHendoLib]

5. As my long time financial advisor told me many times

The market has no heart, soul, conscience or logic.

Her advice to me - diversify, relax and don't watch too closely - or expect it to make sense

[Emile]

6. Spot on!

[bronxiteforever]

7. Stagflation is coming.

[haele]

10. Stagflation is worse than inflation.

At least with inflation, there are still products to buy.
Losses of products to sell and unemployment during Stagflation is much worse than during an inflationary period, and it takes much, much longer to get out of a Stagflation cycle.

[bronxiteforever]

12. Agree. We are headed for this.

[fujiyamasan]

8. Anticipating rate cuts

Bad job report means likely economic slowdown, meaning rate cuts. That’s all it is.

Buy the rumor, sell the news. Expect it to drop once the rates cuts are actually announced.

[EnergizedLib]

11. Wall Street is out of touch with Main Street

[ProfessorGAC]

13. Don't Forget That Market Stays Up....

...in part because of hyperinflated tech stocks.
Tesla, for example, has a market cap over 10x revenue, which is 150x net income.
There is no reason for that other than wishful thinking.

[roamer65]

15. We have a lot of September and October to go.

Shades of 1929 and 2008.

[DemocratSinceBirth]

16. "The market can remain irrational longer than you can remain solvent."

John Maynard Keynes

[ananda]

17. It's definitely artificial to keep Trump in power.

Once the depression comes, well...

[Vinca]

18. Wall Street has been a casino for decades. I remember my husband investing in a couple of things

back when dinosaurs roamed the earth. He investigated each company thoroughly before plunking down the cash and made a modest profit. He lost interest before it became more lucrative than an automatic lottery win. Now something like a crypto company has an IPO, immediately strikes gold, and then in a couple of months it's gone. And if it's associated with Trump, it goes away because he siphoned everyone else's money out of it.

[Happy Hoosier]

20. It's not a casino if you are doing long-term index investing.

In the long term, it's up and to the right. VOO and chill.

It works.

[Happy Hoosier]

19. The markets are reacting right now....

But the markets are not directly tied to the economy as a whole.

I am convinced that large scale index fund investing blunts some of the usual reaction because people like me don't sell on bad news.

[Heidi]

21. Follow the money. (nt)