Stock Market

[ClydeR]

Something happened that has never happened before..
Unheard of in human history..
For the first time in the known universe..
The Dow Jones Average closed above 40,000.
Is it justified?

Let's take a look. As you can see in the chart, starting in 2021, the US economic powerhouse far outpaced other countries, pushing down their percentage shares of global GDP. It's justified, alright.

https://realinvestmentadvice.com/the...lobal-economy/

[Furryrat]

The Dow Jones Industrial Average is a price-weighted bucket of 30 stocks. Therefore, it's mean value (this 40k threshold) is simply an amalgam of the current prices of the 30 stock constituents and their relative percentage weightings within the group. It has no relevance whatsoever in any conversation of GDP.

[Neveragain]

Something happened that has never happened before..
Unheard of in human history..
For the first time in the known universe..
The Dow Jones Average closed above 40,000.
Is it justified?

Let's take a look. As you can see in the chart, starting in 2021, the US economic powerhouse far outpaced other countries, pushing down their percentage shares of global GDP. It's justified, alright.

https://realinvestmentadvice.com/the...lobal-economy/

The population decline is bad.

[Parkbandit]

The Dow Jones Industrial Average is a price-weighted bucket of 30 stocks. Therefore, it's mean value (this 40k threshold) is simply an amalgam of the current prices of the 30 stock constituents and their relative percentage weightings within the group. It has no relevance whatsoever in any conversation of GDP.

There are about 12 terms in this post that ClydeR doesn't understand.

Please use smaller words and more common words in posts to him in the future.

Thank you.

[ClydeR]

The Dow Jones Industrial Average is a price-weighted bucket of 30 stocks. Therefore, it's mean value (this 40k threshold) is simply an amalgam of the current prices of the 30 stock constituents and their relative percentage weightings within the group. It has no relevance whatsoever in any conversation of GDP.

I disagree for two reasons. First, the backward-looking GDP numbers help to explain the Dow Jones average. Surely, the stock market performs better when the economy is strong. Second, the forward-looking Dow Jones average helps to stimulate GDP. The wealthier you are, the more you spend, and the more you spend the stronger the economy becomes.

[Parkbandit]

I disagree for two reasons. First, the backward-looking GDP numbers help to explain the Dow Jones average. Surely, the stock market performs better when the economy is strong. Second, the forward-looking Dow Jones average helps to stimulate GDP. The wealthier you are, the more you spend, and the more you spend the stronger the economy becomes.

The DJIA was $19,732.40 when Trump was inaugurated. It was $30,930.52 when Biden was inaugurated and Trump left office.... and that was after the selloff due to Covid-19, which basically lost all the value it gained in the previous 3 years.

So I assume it is your contention that the economy absolutely exploded under Trump after Covid-19... and I agree.

[Furryrat]

I disagree for two reasons. First, the backward-looking GDP numbers help to explain the Dow Jones average. Surely, the stock market performs better when the economy is strong. Second, the forward-looking Dow Jones average helps to stimulate GDP.

This is grossly over-simplified logic, and flawed at that. Over half of the 30 members of the DJIA have either missed on top or bottom line estimates and/or announced significant layoffs in the past 12 months.

The wealthier you are, the more you spend, and the more you spend the stronger the economy becomes.

Sure, why not, though a bit juvenile a view. Say a company lays off 5000 workers, who cannot now be 'wealthier' and spend more, yet the stock price of said company then goes up due to the costs saved, does that positively or negatively affect what you are calling GDP?