Is the surging stock market a harbinger of a Trump victory?

[SLD]

As Bill Clinton put it, it’s the economy stupid. Actually that was his brilliant campaign manager, James Carville. But as the stock market has soared back into better territory possibly returning to record highs later this summer, I wonder if voters will suddenly be reluctant to switch horses in the middle of an economic rally. As the economy comes back, Trump’s ratings and election prospects will also come back. People will forgive almost anything a president does, as long as the economy stays on track. They don’t care that he’s an autocrat, that he tear gassed peaceful protesters, that he says the stupidest shit ever, that millions died needlessly in a pandemic, or that he snuggles up to dictators and is Putin’s little bitch. They ultimately only care about pocket book issues. If the economy soars, and I am predicting it will, then Trump is almost guaranteed to be re-elected.

 

[Politesse]

I'm not sure people necessarily trust "the stock market" as an indicator of how the economy is doing though. Certainly no one of my generation, there were plenty of years post-recession where the stock market was supposedly "rallying" but everyone was still out of work and wages were frozen. People will vote on how the economy is effecting them. I could see Trump trying to push through some extravagant "back to work" executive order to forcibly re-open the country for business right before the election, though.

 

[Keith&Co.]

I'm not sure people necessarily trust "the stock market" as an indicator of how the economy is doing though. Certainly no one of my generation, there were plenty of years post-recession where the stock market was supposedly "rallying" but everyone was still out of work and wages were frozen. People will vote on how the economy is effecting them. I could see Trump trying to push through some extravagant "back to work" executive order to forcibly re-open the country for business right before the election, though.

That. People finding that The Unemployment Office cannot handle the load, while stadiums are deputized as mass-eviction-notice courts, aren't going to think their economy is booming.

 

[ideologyhunter]

The stock market has diverged from the overall economy, and our working class and middle class have figured this out. With record unemployment and faltering businesses, the NYSE highs are no index at all. Many struggling wage-earners (or wage-losers) see them as the ultimate symbol that rich investors like Trump have lost very little of their net worth while the majority of Americans are adrift in a dystopia. Trump made his attitude shockingly clear last week when he twiddled with his phone for long minutes at a conference at which small business owners were describing in gritty detail what is happening to their livelihoods.
Still, it is likely to be T's delusional statements about covid in the face of a possibly massive second wave that will do him the most damage. He'll keep his 33% Whack Pack no matter what. He could not only shoot that guy on 5th Avenue, he could dance naked in the Rose Garden while waving a Keep Abortion Safe & Legal banner, and keep all their votes. The WH would explain that the nudity was to display his robust health in light of all the rumors -- and he was obviously joking about abortion. (He does need to have any WH staffers who understand statistics to calibrate the dates and crowd size maximums for his rallies so that he doesn't have too many of his fans hospitalized at election time. It's called flattening the curve.)

 

[hurtinbuckaroo]

As Bill Clinton put it, it’s the economy stupid. Actually that was his brilliant campaign manager, James Carville. But as the stock market has soared back into better territory possibly returning to record highs later this summer, I wonder if voters will suddenly be reluctant to switch horses in the middle of an economic rally. As the economy comes back, Trump’s ratings and election prospects will also come back. People will forgive almost anything a president does, as long as the economy stays on track. They don’t care that he’s an autocrat, that he tear gassed peaceful protesters, that he says the stupidest shit ever, that millions died needlessly in a pandemic, or that he snuggles up to dictators and is Putin’s little bitch. They ultimately only care about pocket book issues. If the economy soars, and I am predicting it will, then Trump is almost guaranteed to be re-elected.

If the market rally reflected the general health of the economy, your "don't switch horses" hypothesis might be a bit more likely. It would also be more likely if the broken-down plow horse in the White House could claim any responsibility for the recent modest improvements, but that rings hollow given the historically robust economy he inherited. Add to that the boomerang effect being caused by the many recent flare-ups of COVID, which are causing some businesses to shut down for a second time, while others postpone plans to open.

I work for a company whose revenue is very closely tied to the level of economic activity across the country. We're nowhere close to where we were six months ago. The Dow is still 10-15% below what it was, and at this point is just overreacting to whatever news the day brings. Unemployment is still at horrendous levels; 90% of those people don't benefit from a stock market rebound, because they can't afford to invest.

What is the basis for your prediction that the economy will soar? What do you know that the Fed Chairman doesn't?

 

[funinspace]

A funny day for this thread to start with the major US indices down 2.5-3%...and after 3.5 years the gains are not really that grand.

As Bill Clinton put it, it’s the economy stupid. Actually that was his brilliant campaign manager, James Carville.

Yes, the economy's trajectory/health is very dear to any president's re-election chances.

But as the stock market has soared back into better territory possibly returning to record highs later this summer, I wonder if voters will suddenly be reluctant to switch horses in the middle of an economic rally. As the economy comes back, Trump’s ratings and election prospects will also come back. People will forgive almost anything a president does, as long as the economy stays on track. They don’t care that he’s an autocrat, that he tear gassed peaceful protesters, that he says the stupidest shit ever, that millions died needlessly in a pandemic, or that he snuggles up to dictators and is Putin’s little bitch. They ultimately only care about pocket book issues. If the economy soars, and I am predicting it will, then Trump is almost guaranteed to be re-elected.

Yet, the stock markets are nearly irrelevant to a huge portion of Americans (myself not included). I predict that the economy will limp along with only modest gains in employment as the months go by. Restaurants, bars, stadiums, hotels, gyms, airlines, et.al. are almost all not profitable at a 50% capacity limit (whether by government edict or customer reluctance). We haven't even hit the end of rent/mortgage suspensions, nor the 'keeping the employees on the books' for federal aid ending. I think several airlines have already stated there will be layoffs in September when it ends. Those ending will only add to the pain. The bankruptcies will grow as these businesses are no longer able to juggle the books yet another month. I'm not quite ready to predict that Clownstick has no chance at re-election...but if the economy does as poorly as I expect, I might get there.

 

[TV and credit cards]

First off, I think Trump is stress testing that James Carville quote. If in November retirement accounts pegged to the markets are still looking good, we'll see if the quote holds and if people say, yeah, even Trump. A sad day it will be. Second, the markets are suppose to reflect what investors predict the economy will be in six to nine months. It does not reflect today's economy. Or at least it shouldn't. Over the last month, I've read a number of opinions from fund managers and the like who are as flabbergasted as I that the markets took this V shape recovery. It should not be. I wonder if this is retail investors propping the market up but I don't know if they can do that on their own without institutional investors heavy in stocks. But that's my guess. There are a lot of knobs propping up the market because they see today's economy ain't so bad but it's the government propping it up... for now. I'm calling this a bubble of epic proportions.
Did you read the story about the twenty year old that committed suicide because he was looking at an unsettled margin account and thought he was in the hole $730k? Yeah, that's the type I think is propping up the market right now.
https://www.forbes.com/sites/sergeiklebnikov/2020/06/17/20-year-old-robinhood-customer-dies-by-suicide-after-seeing-a-730000-negative-balance/#55e896951638 This is capitalism run amok. No controls on this shit. When brokerages can entice twenty year olds into what is for all intents and purposes gambling. They just won't realize it until what cash they do have is gone.

https://tradingeconomics.com/united-states/indicators

 

[Cheerful Charlie]

No. Despite ballyhoo from Trump anytime the stock market goes up a bit, Trump is now trailing Biden by double digits. What is more revealing is that surveys show many Americans give Trump credit for a good economy. Despite the fact that Obama should get the credit for pulling us out of the Bush disaster and handing Trump a good economy. And still, Trump is behind in the polling. And with a second wave of covid-19 scheduled to hit us, the economy will be dragged down again, so kiss that off as an election campaign plus for Trump.

 

[Jimmy Higgins]

Lots of states are seeing hospitalization numbers increase and the GOP in each and every one of those states is apparently sold on the Laissez Faire approach to pandemic response.

We don't need to get much more to be stuffing hospitals, reducing services for other people, and then the supply chain starts falling apart. If the stock market is kicking butt by November, maybe things have gotten better. But signs point to bad because the GOP is generally sold on 'let it burn'. But if supply chains are limited, people having to ration meat purchases would likely destroy Trump in November... assuming the GOP allows an election. After all, we are already seeing signs of controversy with mail-in ballots as the Democrats suspiciously won every Democrat primary in NY and KY.

 

[Horatio Parker]

Unemployment is like 13.5%. Will they saying, "At least the market's good."

Besides, aren't many stock gains these days a result of financial engineering?

 

[Elixir]

As Bill Clinton put it, it’s the economy stupid. Actually that was his brilliant campaign manager, James Carville. But as the stock market has soared back into better territory possibly returning to record highs later this summer, I wonder if voters will suddenly be reluctant to switch horses in the middle of an economic rally. As the economy comes back, Trump’s ratings and election prospects will also come back. People will forgive almost anything a president does, as long as the economy stays on track. They don’t care that he’s an autocrat, that he tear gassed peaceful protesters, that he says the stupidest shit ever, that millions died needlessly in a pandemic, or that he snuggles up to dictators and is Putin’s little bitch. They ultimately only care about pocket book issues. If the economy soars, and I am predicting it will, then Trump is almost guaranteed to be re-elected.

I too am predicting a significant surge in the stock market. But not before the election. Trump might be able to convince his idiot followers that Grandma didn't really die, Uncle Bubba isn't really on a ventilator and the bar down the street didn't close due to inability to pay their rent, but investors aren't quite so easily misled. Yeah, we're going to see markets bounce around and there will be good days and bad days (like today - major indices off about 2.5%) and stocks will strain toward pre-covid highs but they won't maintain those levels if/when there is a second wave of the Trump Virus. What we are seeing now with TX and FL quadrupling their infections since Memorial Day isn't a second wave - this is their first wave in those States. And even that is putting a crimp on the equities markets. If form holds, the second wave will be much worse, with commensurate market and economic effects.
It would not surprise me if Americans are forbidden to travel in Europe for another year. I have a good friend who was in Portugal when the virus hit the US and she had to make a choice real quick about whether to come home to the US or ride it out in Portugal. Now she's stuck there, and doesn't think she's allowed to travel around the EU because she's an American...

I think we will probably see really strong markets and a steadily recovering economy by the fall. Of next year. Especially if Dems win big in November.
In fact I'm betting pretty heavily on it, and I am a risk-averse weenie.

 

[SLD]

Whether a lot of people are invested in the market or not is irrelevant. The surging stock market is indicative of a stronger economy down the road. Today’s unemployment numbers are not the issue. What will unemployment be in November is the point. The market is betting it will be back to almost normal, maybe a little higher. The market is not a too bad predictor of the future economy, although it has gotten it wrong on occasion. The second impact that the market has is on people’s retirement. A third of all workers have 401ks, and over 55% of Americans have some form of stock ownership. The numbers are higher for older people who are more likely to be Trump supporters. Third, the stock market is often seen as an economic indicator by the general public even if it shouldn’t be. When people see the markets surging, they get the impression that their economic prospects are better. Even if it’s not the case.

So I do think the economy is going to improve significantly between now and the election and that will likely cause a swing towards Trump as things go on. I certainly hope Biden will be able to pull it off, but I just don’t think he will unless the economy really takes another downturn.

 

[laughing dog]

A surging stock market indicates a current expectation of much better times in the future. It does not indicate when that future is expected to be realized.

Those expectations can change on a dime. I would not take any current stock market upswings or downswings as a reliable indicator the the economy around the election time.

 

[TV and credit cards]

Initial jobless claims look to be leveling off at 1.5M. In a recovering economy this number would be traveling down well below one million. 200K would indicate a good economy. This should be dropping to at least 500K.
Listen up for June's retail sales. After a better than expected May, I expect June's to look about as good as a Trump rally.
Word of the day for retail investors: Hopium.

 

[Ford]

As Bill Clinton put it, it’s the economy stupid. Actually that was his brilliant campaign manager, James Carville. But as the stock market has soared back into better territory possibly returning to record highs later this summer, I wonder if voters will suddenly be reluctant to switch horses in the middle of an economic rally. As the economy comes back, Trump’s ratings and election prospects will also come back. People will forgive almost anything a president does, as long as the economy stays on track. They don’t care that he’s an autocrat, that he tear gassed peaceful protesters, that he says the stupidest shit ever, that millions died needlessly in a pandemic, or that he snuggles up to dictators and is Putin’s little bitch. They ultimately only care about pocket book issues. If the economy soars, and I am predicting it will, then Trump is almost guaranteed to be re-elected.

Yet one of the perennial questions Presidential candidates ask is "are you better off than you were four years ago?"

Unless the economy bounces back in a damned near impossible way - with unemployment dropping back down to pre-pandemic levels in just a few months - the answer will be a resounding "no."

There are roughly 40 million people out of work. At the end of the month, the extra unemployment money they get will vanish, and their pocketbooks will become very tight. Unless some major measures are taken, millions could be facing eviction or foreclosure between now and November. Even if that doesn't happen, and the virus miraculously disappears, AND the world economy (not just the US stock market) begins to rebound, it will not return to anything like it was at the beginning of 2020.

As far as the markets go (and again, the stock market is not the economy), they crave stability. If the past 4 years have taught us anything, it's that Trump is a wild card who can sent the indices plummeting with one poorly timed tweet.

 

[TV and credit cards]

And initial jobless claims come in 100K over estimates at 1.48M. Rut-row.
Well, if they do let the $600 bump expire next month and people still can’t find jobs, they can always google “protests near me”.

 

[funinspace]

The surging stock market is indicative of a stronger economy down the road.

I offer a ride down memory lane heading into the 2008-9 financial crisis, as the DJIA did not provide indications for the economy down the road. According to NBER the recession started in Dec 2007. The DJIA hit a new high in Oct 2007. Over the next few months, it had slipped down by about 15%. By May, 2008 the DJIA had recovered to about 8% from that high seemingly to look better. Unemployment had been around 5% for a year. By June 2008, it had ticked up to 5.6% with all signs upward. Yet the DJIA only seemed to notice after it got worse. The DJIA did not see the crash that was coming that pretty much bottomed around Dec 2008 - Mar 2009, until it was pretty much hitting the wall.

Obviously, this pandemic driven event is quite different. But how it plays out going forward is also a mystery as it is rather novel...

Today’s unemployment numbers are not the issue. What will unemployment be in November is the point.

You should take a look at unemployment numbers from the summer of 1992 to November, the recover from the rather mild recession still tanked HWB effort to win re-election.

 

[Jimmy Higgins]

A surging stock market indicates a current expectation of much better times in the future. It does not indicate when that future is expected to be realized.

Those expectations can change on a dime. I would not take any current stock market upswings or downswings as a reliable indicator the the economy around the election time.

You mean like when the Dow goes up 400 points based on a Trump tweet (baseless) on China trade?

And initial jobless claims come in 100K over estimates at 1.48M. Rut-row.

Well, if they do let the $600 bump expire next month and people still can’t find jobs, they can always google “protests near me”.

Is this a good place to whine about how the blue states are having their wealth redistributed to help subsidize the bullshit low unemployment payments in red states? Asking for a friend.

 

[southernhybrid]

The market has been highly volatile and as has already been mentioned, the stock market isn't the economy. I really don't think the economy is going to help Trump, even if it does begin to surge this fall. It's going to take a long time to return to a healthier economic outlook. I doubt that's going to happen until the virus is over. And, some predict that the pandemic is changing people's habits in the long term.

In recent years, the economy has only been good for the more affluent, not for the average worker or average retiree.

I read an article that there were a lot of traders in the market now. While it mentioned young men, I feel that there is probably a lot of institutional trading going on as well. That's the only thing that makes sense to me when you look at how volatile the market has been over the past few months.

I had a good laugh yesterday listening to some of the CNBC regulars. They were freaking out because Biden has said he will raise taxes on large corporations if he is elected. Poor babies. The market did well when Obama was president and corporate taxes were higher. One huge problem is corporations doing large stock buybacks. I just learned yesterday that was only made legal in 1982. Fucking Reagan. But, I digress.

 

[ZiprHead]