There is a long-held false assumption: over long term, stock market will go up as long as GDP goes up. However, it is not proven by the facts. Between 1989 to 2008, Japan grew 30% in GDP while Japanese market was down 78%. I believe GDP has an asymmetric relationship with stock market. Negative GDP will bring down the stock market but positive GDP may or may not prop up the stock market. The other factors are very important are: valuations, leverage level, inflation and interest rate, new technology.
The market will have a pop at the open today but I am not sure if it can last.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment