S&P 500 Sets First Record Since February, Erasing Its Coronavirus Plunge | Hacker News Reader

S&P 500 Sets First Record Since February, Erasing Its Coronavirus Plunge

wsj.com

12 pointstempsy6 comments

This has been a time to rethink how we understand the markets. Macro economic conditions are in no way back to normal. How can we be approaching all time highs? I would predict a market correction but what do I know? I am simply in shock with the state of the market. Maybe I underestimate the growth of retail investing?

The S&P500 is not an index of the entire economy. It's heavily weighted towards the tech sector.

The hardest hit businesses (retail, restaurants, service) were small parts of the S&P500 because they usually don't have the economies of scale that tech has, and therefore don't produce the mega-caps that dominate the S&P500.

it's supposed to be a broad index representative of most if not all publicly traded industries. tech is heavily represented because it's become the largest sector as far as total market cap goes.

there are equal weighted index that trade - it's not nearly as recovered as the market cap weighted one but recovered significantly nonetheless. energy, transports, utilities, and certain retail companies have been doing well.

money printer go brrr, Trump doesn’t like to lose, and this time he’s at the controls

The price of securities is also an interface between the perceived value of the company and the value of US dollars exchanged for shares thereof. So while the market may be “bullish,” it could also be that the value of dollars has dropped and it takes more of them to convince another trader to let go of their shares.

Obviously the forces at play are quite complicated, but it’s my belief that this is driving a good part of the rise. Who wants cash when the Fed is printing $trillions? Companies can raise their prices to keep their costs at the same fraction of revenue, so in the current environment of loose money it seems a sounder investment to many, especially if the government eventually continues the direct-to-citizen stimulus.

This is not financial advice etc.

I wonder what the long term ramifications will look like of this debt. Even a democratic president won't be able to raise taxes enough to get debt levels back to a healthy level and the interest the US is going to owe is an alarming % of the federal budget. The US can say goodbye to the dollar being the world's reserve currency and goodbye to funding the programs that might spur renewed growth.

They do say crisis is an accelerator of the rise and fall of super powers!

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