alt Hacker NewsThe strong job numbers too.
On a side note, I find it very sad that strong job numbers make stock plummet.
It really is an indication that the stock market is mostly speculative and not concerned about the actual economy.
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> not concerned about the actual economy.
Why would it be? Non dividend stocks only have value because other people think they have value (i.e. greater fool theory).
Only dividend stocks have some base value connected to how well the company does. (Higher dividend if it does well, lower if it does poorly.) But they still also have a lot of "greater fool" value.
Beyond dividend, stocks have no intrinsic value. Nowadays you don't even get a piece of paper to wipe your ass with anymore, it's all digital.
These companies are capex heavy and need to reach into the capital markets to sustain their growth. The cost of capital is correlated with inflation. Why is this the fault of the stock market? Maybe blame the government for diluting the money supply?
Strong job numbers with rising inflation means potential hikes to the federal funds rate which increases borrowing costs which reduces profitability which means stock prices go down. Strange causality chain, but that’s how Mr. Market thinks.
> It really is an indication that the stock market is mostly speculative and not concerned about the actual economy
Not really. Strong jobs numbers in the midst of 3+ percent inflation means rates should go up. That, in turn, dilates time on future earnings. So making a company's future earnings more-heavily discounted will be a net drag on valuations even if the jobs numbers indicate those numbers, near term and far, will be higher.