The performance of the stock market is more related to the money printing by the federal reserve than anything else. Modern economics seems to deny this, and thus will make articles like this.
But that money has already entered the stock market. It doesn't explain it now.
Interest rates are high now, so in theory investment in the stock market should be lower (and it was for a long time - see all the people investing in treasuries to get the great and safe returns)
> It's been living in the reverse repo market, it's slowly trickling out.
While this is true, the "trickling out" timing doesn't appear to correlate very well stock market increases.
It's true that reverse repos have been decreasing and the stock market increasing. But the timing of movement seems too far out for there to be much of a causal link.
I think the US printed a couple of TRILLION dollars during COVID. The money hasn’t gone anywhere so if you’re American and don’t have the $80000 per person someone else has your cash.
Edit: not sure why you’re downvoting! It was actually $3.3tn in 2020 alone which is wild.
That was during Covid, but it is 2024 now. The Fed started quantitative tightening in June 2022 and has sold over $1.3 trillion in assets; it also raised interest rates to the highest level in two decades. These are traditionally considered contractionary monetary policies, the opposite of "printing money".
Wild indeed. When the velocity of it picks up, we will see distortion and it will be hard to decide what a thing is worth. If everyone had a free 80K, i'm not selling my used car cheap anymore.
This is exactly what the article is saying - low interest rates set by the fed and corporate tax rates in the last decade led to higher corporate profits, and higher multiples, which was also probably fueled by investors with more cash and corporate buybacks.
To a point. Who wants to own stocks in a country with hyperinflation. Of course this is a nitpick because it is unlikely to happen to the US anytime soon.
No, stimulus affects the market positively. It was a K-type recovery, the market went up and the real economy didn't. The market dislocated in the 80's and every decade or so we have a crash that makes the rich richer. Whatever comes along, they weasel more money from us and the government.