Will the current rally in US stock market help it’s economy in the long run?.

[Juggy777]

I’m not so sure if we will witness more bull rallies in the US stock market this year, but apparently Trump believes that more such rallies will come this year, and he even claims that this is the proof that US economy is already improving.

Furthermore he also states that US economy will continue to rebound by September, and it’ll completely rise by 2021, but many people do not agree with his analysis as they claim that 40 million US citizens have already lost their jobs, and hence it won’t be so easy to revive the economy by 2021.

What are your analysis on this, do you’ll agree with his thoughts or do you’ll too feel that the US economy cannot be revived by 2021.

"I feel more and more confident that our economy is in the early stages of coming back very strong," he tweeted. "Not everyone agrees with me, but I have little doubt."

"Watch for September, October, November," Trump continued. "Next year will be one of the best ever, and look at the Stock Market NOW!"

Source:

https://markets.businessinsider.com/news/stocks/trump-cheers-stock-rally-us-economy-coming-back-very-strong-2020-6-1029279666

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[palle11]

A problem is solved if you identity it. The problem in the US economy at the moment is that millions jobs have been lost , so it won't be much of a problem anymore. US is making new money available already. I think what Trump could be looking at is to make money available to industries as stimulus. If the manufacturing sector go back fully, the economy will have a boost. So I think it is still possible that the economy will come back and with election around the corner, Trump is likely to fast track things.

[Sanugarid]

To assume the date of the recovery is difficult to analyze now because the pandemic is still in effect to the world. Besides, it won't take that very long for the America to recover their losses, I'm pretty sure they already have come up to a solution for this threatening situation. But let's say the pandemic will end before December, within this year, I feel like they'd be more than recover before the 2022, for me it would take at least a year to fully recover.

I interpret the rally on the USA stock market as a hope, it is more of taking advantage of low prices thinking that it will increase in later years.

Nah, don't believe on Trump, he must be thinking of pure good things now coz you know what's happening in the america right now.

[dothebeats]

The POTUS is continuously drawing lines on the sand and not addressing the domestic problems his country is facing currently. That's very un-gentlemanly, and un-Presidently if you ask me, but what do you really expect from someone who runs his mouth first before checking at the facts. Stock markets are only one facet of the economy while the rest is mainly from taxes which the working class contributes heavily to, and with some 40 million Americans currently unemployed, how would a bounce back in September be possible? I'm not a pessimist but all points signal south of what Trump likes to make it look like.

[gentlemand]

There've long been two economies - the one you see on trading screens where money is magicked up out of nowhere and winds up in the right pockets, and then you have the day to day reality for the millions of little people slowly getting worse off by the week.

I presume the divide will grow ever starker. They'll throw crumbs at the real people but concentrate on keeping those plates spinning at the top. The only thing that'll change that is how vocal the peons become about it and we're seeing the responses they're willing to throw at that right now.

[figmentofmyass]

it certainly doesn't help in any direct way.

the only way it helps IMO is psychologically. it could make people more optimistic about an economic recovery. that could mean improved consumer confidence, which in turn could stimulate spending that is so badly needed by businesses.

investors are just betting on a strong economic recovery. that doesn't guarantee they'll actually get one.

Stock markets are only one facet of the economy while the rest is mainly from taxes which the working class contributes heavily to, and with some 40 million Americans currently unemployed, how would a bounce back in September be possible? I'm not a pessimist but all points signal south of what Trump likes to make it look like.

+1. he looks very out of touch when he celebrates the stock market while remaining silent on insane unemployment levels.

[Gyfts]

The stock market can be a prediction of what's to come and it can be based on speculation, I don't think it's all that great of a metric to measure the economy in the long run. We already have the job loss numbers and GDP numbers which indicate a recovery is going to take nearly 10 years.

The stock market is probably people just buying low knowing that it's going to recover at some point, this doesn't mean the economic turmoil isn't going to last far beyond than that the stock market might "predict".

[bitmover]

It is not the stock market that help the economy, it is the other way around.

Analysts believe that the economy will recover next year, this is why they are getting stocks now, as that recovered (next year) is already priced in. Simple as that

[Darker45]

For sure, the majority of the Americans will not agree.

All these talks of rallying stock market, improving US economy which is primarily measured by its GDP, and so on are nauseating to say the least.

High figures in relation to these claims do not mean anything at all. These are all hollow numbers as far as the real day-to-day life of a jobless father and mother moving heaven and earth just to put food on the table.

[Ozero]

Apparently Trump is simply hoping to print again enough dollars and thus boost the US economy. If other states do the same, then a global economic crisis will be inevitable. Due to unprecedented measures to combat the spread of coronavirus, the global economy is now very weak and it will take more time to restore it than one year. This should take about three years. In addition, the coronavirus is still not completely defeated, and it is too early to talk about the timing of the restoration of markets and state economies.

[Wexnident]

Doesn't necessarily mean that it would happen though, and I doubt many would actually believe it. It's more like them putting assurance to the heart of the masses temporarily, but that's it. Without any results, they'd probably suffer the repercussions of what they said, and by 2021 at that. Let's not even mention how the current pandemic accelerated the downfall of the US economy. In all honesty, if the US doesn't move properly, they might get shoved off of their throne as a top country.

Additionally, you can also plainly see that the words of Trump are for the masses. I doubt those rich guys would actually believe what Trump is saying right now, and instead would probably think how they can increase their riches much more than what it is right now.

[Upgrade00]

The message could just be a strategy to increase confidence and optimism around the economy. The U.S. election is only a few months away, and the president is reluctant to admit the extent of the current economic crisis in the nation.
The pandemic is still spreading and the numbers increasing, this would further dampen the economy and slow the recovery process, more people would likely become unemployed (temporarily or permanently), more businesses would shut down, and spending will get slower.

Almost all indicators are not looking good and the one that is, is being put in lights. We would likely see more campaign strategies like this in the coming months.

[abhiseshakana]

The rally of the past few days is caused by the sentiment of economic recovery welcoming the reopening of the economy (Anything we can do to start coming out of an economic recession will cause the market to react positively). The rally was also triggered by optimism about the discovery of vaccines which became the ultimate weapon in the fight against the coronavirus pandemic.

Global economic conditions are still uncertain. Covid-19 has an impact on the real sector and will be transmitted to the financial sector, just how the government conducts policies for mitigation so that the impact is not too deep.

The money market as a place of demand and supply of funds and important documents traded in the short term which is certainly prone to speculation and identical to where speculators seek profit even though some use it for capital certainty. So this sector can not sustain the real sector at all even more often cause problems for the real sector.

[davis196]

The conclusion that some stock market rally(that might be short term) will lead to a fast economic recovery is partially wrong.The stock market was pumped by the Federal reserve system's never ending money printing,quantitative easing,low interest rates,etc...The 'easy money' policy pumped the stock markets,even though the unemployment is at a historical peak.The correlation between that real economy and the "financial economy" of the banks and Wall Street is more or less broken,so we can't predict the future of the economy based on what's happening on Wall Street.

[Febo]

Will the current rally in US stock market help it’s economy in the long run?.

It is simply insane that Dow Jones is less then 10% under its peak. And even when the peak happened everyone was saying it is a balloon full of hot air. Rally on stock market for sure helps Economy. Until the point when it crash. Then will fun time start.

[mersal]

I feel like this is the short term surge created to keep their economy alive just because of the president election but in long run they are going to take hit like all other countries, especially the middle class people who already lost their jobs in millions.

[fillippone]

Do you think Stock market if rallying because today's good emplyoment figures?

Wrong.

Look here: look how much money has been printed:

	G4 CB's assets in USD. FED is leading the pack, followed by ECB	CB's asset over their relative GDP. The picture is quite different. FED has way more space to go even more aggressive

FED went full brrrrr lately, absolute numbers are staggering, but also US economy is by fare the biggest. Fact is monetary stimulus is adding to fiscal stimulus from government. This remembers me of Zimbawe. Little difference: there is no inflation to the horizon, and US Dollar is also stronger than ever. Rest of the world is routing and everybody want to buy dollar.

	CB assets since 2008, in percentage terms

So, this stock rally is entirely financially created. As long as FED and Treasury are pumping money in the Economy is rational to go long equity. But you know they are inflatinga bubble, and this bubble, has eventually to pop. one day or another. Of course this is the last thing they will allow to happen as everybody has to lose from it.


NB: Some difficut ones: PBOC=People Bank Of China, BOC Bank Of Canada, RBA Reserve Bank of Australia

[Kakmakr]

Donald Trump has to say that, because the US are being burnt down around him. It is pure election talk and nothing more....   You have to put yourself in his shoes... 1. The Covid crisis under his administration has been one big joke... 2. The job losses is a direct result of the poor manner in which this crisis was handled.... 3. The George Floyed thing and his hard handed response to the riots are not counting in his favour now.  

So what do you in his shoes... well, tell the people that everything will be fine and the US economy will bounce back. Now, tention between China are escalating and the trade wars was a fiasco.  

[el kaka22]

I am not entirely sure about the 40 million people losing their job part. I don't know if it is a proven fact, because if it is, that is very very scary. Don't get me wrong I hate Trump as much as the next guy but honestly 40 million looks a bit more mainstream media exaggeration, but that is just my idea, of course it could be very true.

In case it is true, that 40 million probably had people who wouldn't vote for any candidate at all that switched to Biden or even maybe some Trump supporter moving to either not voting or even Biden. Now the things that will happen depending on the elections, if Trump wins the economy will "look" better in stats but the regular people will be going worse, if Biden wins it will suck for a while when he is trying to recover the mess Trump leaves, but long term it will be better.

[figmentofmyass]

I am not entirely sure about the 40 million people losing their job part.

the number is based on initial unemployment claims since the pandemic/lockdowns started: https://www.washingtonpost.com/business/2020/05/28/unemployment-claims-coronavirus/

presumably some of those people have returned to work since initially filing.

the official unemployment rate actually dropped in may with 2.5 million jobs added, a great surprise to many. the jobs data was published rather deceptively though. the labor dept said the official unemployment rate dropped to 13.3% but in the fine print:

The Labor Department cautioned that data-collection issues that have plagued the agency throughout the crisis continued last month. Some temporarily jobless workers were characterized as “employed” in May; had they been counted correctly, the department said, the unemployment rate would have topped 16 percent.

so the real unemployment rate was over 16%. https://www.nytimes.com/2020/06/05/business/economy/jobs-report.html

the dow and s&p500 surged on the news that the unemployment rate dropped. i still think it's premature to celebrate. it's obvious payrolls have been propped up by the bailout loan program. as those loans get phased out, we'll see how sustainable the recovery really is.