Why such a bad end of May & start of June?

[street]

Just remember, the market is not the economy. They are lightly correlated, but short term economy has no correlation.

Yes, I agree 100% good point.

 

[Koolau]

idk, there might be some points. Percent up is not a measure of size. It does state there are 4300 public companies today in (presumably) the DOW, whereas that number was 7300 in 1996, and there are far more private companies than before - that all underscores the "market is not the economy" argument.

I have no idea what the effect is in terms of "bigger" or "smaller" or in terms of the "point" the author was trying to make BUT there has been a boatload of consolidation in that time period (how many fewer airlines now than then, for instance.) So simply saying there are fewer public companies doesn't mean much to me. The fact that there are more private companies (to me) just means that the economy is doing very well and people are willing to invest in more risky things right now. No expert here, so YMMV.

 

[Al18]

The SP500 is currently up for the week, 1 month, 3 month, 6 month, YTD and 1 year. Looks good to me.

 

[DCdave]

idk, there might be some points. Percent up is not a measure of size. It does state there are 4300 public companies today in (presumably) the DOW, whereas that number was 7300 in 1996, and there are far more private companies than before - that all underscores the "market is not the economy" argument.

If more private investors are going to these private companies and equities then, yes, the market is smaller. And that has happened a lot.

The title is clickbait (and journalists almost never get to write their own titles) but if there were a pie chart of where people's money is today, it would appear the slice that's in the public-stock-market is smaller than in recent history, and I'd buy that.

Yes there are fewer publicly traded companies, than there were in 1996, but the market cap has grown to a considerable extent.
The chart I am looking at doesn’t go back to 1996 but at the end of 1998 the total market cap for US publicly traded companies was 13.5 trillion and it is now over 51 trillion. People do shift their assets over time but a headline (which you correctly point out was probably not written by the author) that people are leaving the market in “droves” is misleading/laughable.

 

[JoeWras]

Good point about headline writers. That tainted my thoughts greatly. Maybe this is one reason I never got into journalism. To have an outside editor ruin your story with a ridiculous headline is scandalous.

The subject of consolidation of businesses and fewer IPOs is important enough. Some of the other stuff in the story didn't belong there.

 

[OrigamiRN]

To me, it's less about the current level of interest rates but just how quickly they can rise - due to inflation. Nearly the only "lever" to control inflation is the interest rates. Without the current (and very recent) inflation, we would still be at relatively low interest rates. YMMV

There are three levers to reduce inflation. Increasing interest rates is one, increasing taxes is another, and Quantitative Tightening is the third. All are extremely effective. QT is still ongoing, although at a reduced rate, and is still helping to keep a lid on inflation.

 

[Koolau]

There are three levers to reduce inflation. Increasing interest rates is one, increasing taxes is another, and Quantitative Tightening is the third. All are extremely effective. QT is still ongoing, although at a reduced rate, and is still helping to keep a lid on inflation.

I guess one more: Gummint could stop spending money we don't have and printing money to cover the short fall - but I wouldn't count on it. YMMV