The Worse Things Get, The More The Stock Market Likes It – Investment Watch

by Michael Snyder

Stock Prices Going Up Pixabay

Regardless of how unhealthy issues develop into, inventory costs simply preserve going up and up and up.  In 2020, we skilled the worst public well being disaster in 100 years, the U.S. economic system was plunged into the worst financial downturn for the reason that Nice Despair of the Nineteen Thirties, Individuals filed greater than 70 million claims for unemployment advantages, and civil unrest raged in main cities all throughout the US.  In the meantime, we witnessed the best inventory market rally in American historical past.  It doesn’t matter what occurred, nothing may appear to dampen the wild euphoria on Wall Avenue.

To start out 2021, many believed that we had lastly reached a degree when unhealthy information would lastly begin driving inventory costs down.  Yesterday, I wrote about how some consultants were warning that inventory costs may fall considerably if Democrats gained management of the U.S. Senate after the runoff elections in Georgia.  Properly, within the short-term these consultants have been confirmed fallacious.  In actual fact, the Dow Jones Industrial Common truly rose 437 factors on Wednesday.

After all the larger information on Wednesday was the utter chaos that we witnessed on the U.S. Capitol in Washington.  Doorways and home windows have been smashed, members of Congress needed to be evacuated, and protesters freely roamed by means of the halls and workplaces.  You’ll assume that one thing like that might positively ship inventory costs plunging, however as a substitute the Dow ended the day up 437 factors.

Regardless that now we have simply come by means of the worst yr in current reminiscence, and regardless that our system of presidency is in disarray, inventory costs hit an all-time report excessive on Wednesday.

One rationalization for that is that traders contemplate the chaos in Washington to simply be “short-term”…

“Though the takeover of the Capitol is stunning, it’s broadly perceived to be short-term and contained in scope, not less than within the instant time period,” says Yung-Yu Ma, chief funding strategist and managing director at BMO Wealth Administration.

“That is going to be handled fairly swiftly and received’t have lasting repercussions by way of disruptions to the federal government,” Ma added. “It received’t change the trajectory of a Biden presidency within the coming weeks.”

We will see what occurs, however lots of people on the market usually are not so optimistic that the governmental shaking that now we have been witnessing will go so simply.

Transferring ahead, traders seem like salivating on the prospect {that a} Biden administration will imply that more stimulus money is on the way

“I believe there’s an expectation … that there’s going to be much more spending,” Jason Trennert, chairman of Strategas, stated on CNBC’s “Squawk Field” on Wednesday. “If the Democrats have been to choose up two seats, there’s no query in my thoughts that later this yr there could be a way that extra spending is required.”

Goldman Sachs expects one other large stimulus package deal to the tune of $600 billion within the close to time period if Democrats prevail and take the Senate.

Why not make it $600 trillion?

Each greenback that we borrow and spend simply makes our long-term issues even worse, and so why not get the method over with?

As I mentioned the other day, the trillions of {dollars} which have already been pumped into our system over the previous 12 months by the Federal Reserve and by our legislators in Washington have essentially modified the trajectory of our future.  The cash provide is rising at an exponential price, and we at the moment are on a hyperinflationary path.

Sadly, underneath a Biden administration there shall be no going again.  As an alternative, the accelerator shall be pushed even additional towards the ground.

But it surely isn’t simply our monetary system that’s in grave hazard.

Our system of presidency can also be in grave hazard as nicely.

Our tradition is in grave hazard too.

In actual fact, our total society is in grave hazard.

There’s no future for our country if we keep on the trail that we’re presently on.  We’re participating in self-destructive habits in hundreds of various methods, and regardless that there have been infinite warnings, we’re so hooked on our self-destructive habits that we simply can’t assist ourselves.

At this level, it’s troublesome to think about how anybody can probably be optimistic about the way forward for our nation.

However apparently inventory market traders disagree, as a result of they only preserve pushing inventory costs larger and better.

It shall be very fascinating to observe how excessive they will go earlier than the system lastly implodes.


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