Why is the Stock Market surging?

[louis c]

Last edited Wed Nov 29, 2017, 09:59 AM - Edit history (1)

First, Trump inherited a strong economy.

Then, through executive orders, he rescinded Obama era regulations that had the effect of allowing Wall St., the Banks and other financial institutions to, once again, steal from the general public without fear of any consequences (think 2001 to 2008).

And lastly, Trump and his Republican coconspirators will not only let their cronies legally steal from us, they are going to pay as little as possible, in taxes, for that ill gotten loot.

This is not a new plan. the Republicans did it in the 1920's, and again from 2001 to 2008. We all know how that turned out.

[no_hypocrisy]

1. Stock value goes up when corporations buy back their own stock.

It's an artificial increase in value, based on internal demand, not based on how much profit the corporation has made with manageable debt. With a good economy, the corporations make good profits and instead of re-investing that profit into expansion, research & development, and hiring more employees, that money goes to artificially inflate the value of stock. But when non-corporate purchasers of stock stop buying that stock, the risk is the value of that stock goes down, perhaps crashes.

[Cicada]

2. It is mostly several big firms, google amazon etc

Profits are up up up, or in amazons nonprofit world sales are up up up

A surprisingly big share of stock growth is from a few big firms

[eShirl]

3. because corporations will use tax cuts to pay dividends

[leftynyc]

4. Corporate tax cuts

The drop from 35% to 20% is going to make these companies billions. Of course, they're only going to use that extra cash to reward their top executives and their shareholders and not to hire more employees or expand their business so for them it's just gravy. It's also sickening.

[uponit7771]

5. Big money moving out of bonds because rates too low, stock buy backs and you're

... right to be skeptical very few times does the market do almost 30% growth in less than a year.

Big money (hundreds of billions and trillions in holdings) don't put their money in places like the DOW which can be moved by 50 billion dollars on any given day.

They put money into bonds where they can plow it into something stable

[mythology]

6. And because the stock market is primarily short term

These stupid tax cuts will boost corporate profits in the short term. Unfortunately they will continue our long slide into a have and have not society which will cause corporate profits to drop long term when people can't afford to buy (or borrow money to buy) more stuff.

It's the same greed that brought us Enron and the banking crisis of the 1980s in addition to those you mentioned.

[nolabels]

12. And if you are smart enough, easy and fast to get out before it crashes

Where else could a big fish gamble like that come away with sure cash anyway?

[Yavin4]

7. Low Interest Rates + Potentially Lower Corporate Taxes Massive amounts of corporate money

which mean bigger buy backs to prop up the stocks. The problem is that the era of low interest rates is coming to a quick end, and the lowering of taxes does not increase demand as that money never gets into the hands of consumers.

[Vinca]

8. I don't know much about the workings of the stock market, but one thing is certain -

Republicans always manage to wreck the economy and someday the current boom times will be a memory.

[NCTraveler]

9. The investor class is doing well. Nt

[GeoWilliam750]

10. Because it it the only asset class with the potential for sustained high single digit returns

Also, investors continue to flee the very rich bond market, as the potential for even mid-single digit returns vanishes.

Trump talks about the surging stock market, but he does not talk about the ugly - and much more important - bond market over the last 16 months.

[spanone]

11. corporate america is free to screw anyone they wish...regulations are disappearing everywhere

[louis c]

13. Thanks, you grasp my point. (NT)