No correlation between S&P 500 and GDP, Fed has broken it down: Economist
HTML-код
- Опубликовано: 28 июл 2024
- David Rosenberg, Rosenberg Research chief economist, and Craig Columbus, Columbus Macro CEO, join 'Power Lunch' to discuss the recent meeting notes from the Fed's April meeting and what it means for the U.S. economy.
For access to live and exclusive video from CNBC subscribe to CNBC PRO:
cnb.cx/2JdMwO7
» Subscribe to CNBC TV: cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: cnb.cx/SubscribeCNBCclassic
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
Connect with CNBC News Online
Get the latest news: www.cnbc.com/
Follow CNBC on LinkedIn: cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC
#CNBC
#CNBC TV
![MORTAL KOMBAT 1 - KOMBAT PACK 2 REVEAL TRAILER!! [REACTION]](http://i.ytimg.com/vi/Mi2M58zEQVc/mqdefault.jpg)
Remember when America couldn't afford to spend any money on: infrastructure, schooling supplies, healthcare, etc? How weird that there's money to give to big businesses and banks 🤫🤔. It's almost like the economy is fake 🤣. Back To Sleep America 😴.
Exactly.
I don't remember because I wasn't born in the 1800's. Please enlighten us on what times were like when America didn't spend exorbitant amounts of money on those things.
they are printing money, devaluing your savings and purchasing power, to save over-leveraged indebted entities from going bankrupt
@@breakfastcasual3579 FED balance sheet is 9 Trillion and rising. I didn't know the FED spent on bridges and healthcare. They did bail out hedge funds levaraged 50 to 1 and are buying junk bonds. Their balance sheet has Trillions of toxic assets the free market doesn't want.
@@breakfastcasual3579 Oh for sure America spends so much money on infrastructure, thats why all the roads, and bridges are barely holding together and we have an F rating in all parts of the country..
50 million unemployed. Stocks are back to normal. WTF!
The economy and stocks somewhat correlate with each other. The problem is people were taught for years that they work hand-in-hand when that isn't true.
The S&P 500 down 12 percent in 3 months is what you call normal?
Eternalwarpuppy stocks were already overvalued before Covid19.
Those 50 million people dont own stocks though.
Most of those people are now getting more money for sitting at home. Guess where they're gonna dump that money.
Fed: Money printer go BRRR
WSbets
Unemployment office go TSK TSK TSK
Millions are unemployed and no one wants to go out.
Feds: I know just the thing, I'll buy stocks. You're welcome billionaires.
At this rate of increase , we will have the biggest bubble way before year end.
It is not hard to see that the stock marked is overvalued. But still should you fight the fed? Investing in the market these days is more about judging how far the fed will go rather than judging the business themself.
@@heww3960 S&P500 tracks finance companies, and finance tracks assets. Due to QE assets are decoupled from underlying profits. Therefore, GDP is decoupled from asset prices.
Market has changed forever no more free market.
That is called socialism.
@@issenvan1050 Stop drinking your conservative kool-aid. Socialism (in conservative terms) and free-market always had a direct relationship. No offense but the whole socialism argument is only there to convience you to vote against your interest.
Free market hasn't existed in my lifetime.
Born in 74.
@@issenvan1050 do you use sugar in you koolaide?
late capitalism sucks. end capitalism
hope manuchin and these clowns get prosecuted criminally for destroying the efficient markets in the USA. the market here resembles the one in Liberia
They won't be prosecuted. They will be credited because the stock market bubble and even housing bubble will be reinflated. Of course Liberia will probably have tamer inflation than us in the future.
Just because it’s not illegal doesn’t mean it’s ok. Genocide was legal in Nazi Germany.
Markets were never "free."
It's now a goverment backed savings/retirement fund.
backed by fake money
How could CNBC let this guy on? Someone not calling for a booming economy in a few short weeks? Crazy!
Yes, appearing of Mr Rosenberg is an anomaly.
How can the Economy possibly recover when the bubble market is ready to crash the moment we hear “Coronavirus Spreading, Shut Down Again!”
Hello, you stimulate demand with price discounts.
There won't be any economy recovery in years. Market and economy are two different things. Market rallied on unprecedented never seen before since the Great Depression period 36 million unemployment number because of Fama-French's efficient market theory. Everything has been priced in forward in time aka quarter price earnings forward multiple or PE. Right now the price is based on 2022 earnings forecast $180 target SPX at 5000. Ben Felix on why Stock Market price is different than current Economic condition:
ruclips.net/video/0ECqDaPjjV0/видео.html
Market is controlled by punditocracy. May sell off failed, market find support in 2780 double bottom retest. The reason market rallying is because Covid19 is assessed to be no different than Spanish flu 1918. Consider these historical facts:
(1) Market collapsed 21.7% in 1917 before Spanish flu while US had the "greatest" economy before the virus
(2) First wave of Spanish flu began in early Spring of 1918 DOW rallied 10.5%
(3) Second wave began to spread in US for the first time in late December 1918, killed 675k Americans DOW rallied 30.5% by the end of 1919
(4) Global health care were abysmally undeveloped no rapid response system, it was Flintstone versus Star Trek
(5) DOW rallied 4 weeks ahead of peak of death and never test the low in early Spring 1919
(6) Third wave hit US the second time in early Spring 1919, while DOW never looked back
(7) Spanish flu mutated three times
(8) There were no vaccine for Spanish flu while we have Moderna, Pfizer, J&J, and Oxford vaccines
(9) There were no therapeutic treatment for Spanish flu while we have Gilead's Remdesivir
(10) There were no FED monetary easing to solve illiquidity issue
(11) There were no Government fiscal bailout to solve unemployment issue
(12) 1919 stands as the ninth best year for the Dow from 1915 to 2019
(13) Real gross national product grew in 1919, albeit by a modest 1% (Romer 1988)
(14) Indicators of aggregate economic activity suffered modestly in early Spring 1919, recovered within months (Velde 2020)
(15) Spanish flu killed productive workers age between 20s to 30s while Covid19 targeted older people with less risk to work force
Punditocracy is aiming high to burn traders who bought put for June expiration contract. Market won't stop grinding to test Super Tuesday until June contract expire, hurting speculative traders. Currently FED balance sheet barely scratch 29% US GDP, they have $20T more to unleash. May won't be sell off as FED start buying corporate junk bonds solving insolvency issue. April 8 marked "whatever it takes" attitude where FED offered fix 3% interest rate for 4 year loan backed by US Treasury solving debt cycle issue. Market is efficient everything has been priced in all the way to 2022 economic forecast, do not fight the FED. Economy will take 5 years to recover that's why current market valuation has high PE ratio as it is pricing 1 to 2 years ahead not present economic situation.
Two videos to watch (seeing is believing):
(1) Zimmermann in October laid out the ABCDE bear market correction that began since 2018 (wave A) and ended on March 25th 2020 (wave E). I exited all of my position on Thursday January 23 after Intel report earnings and back all in on Monday March 16.
ruclips.net/video/g1O_svyiJBA/видео.html
(2) Williams on why after bigger than -30% pullback any weekly closed 50% retracement is the start of a new bull market rally. Since the end of Civil War SPX 1873 to present day there were only ten greater than -30% pullback. Never violated once.
ruclips.net/video/yy4B1DlZ3Q0/видео.html
PE currently is at 20 times forward quarterly earnings or equivalent to 5 year forward valuation (FactSet). So market is currently priced in for recovery by 2025. Anyone buying now is too late as you will be buying forward to 2026 onward. Market is rallying not with fundamental but because FED is pumping. As long as FED pumping market will keep rallying despite whatever fundamental is saying. The goal is to keep pumping at least for five year until fundamental catch up then start reducing FED balance sheet by 2025 when market's fundamental already stabilized. On Monday May 11, Becky on Sqwak Box asked Mohammad El-Erian regarding what would happen if FED start slowing down the pump? As usual El-Erian avoided answering the question politely, because the answer is obvious market would free fall. Moral of the story, FED still has $20T more to pump. Currently FED only utilized $6T so they can deploy more. For a reminder during the Great Recession in 2008 FED barely pumping $900B. On March and April FED pumped 6 times than during the Great Recession and they still have more to unleash. Ed Yardani said, FED not only has bazookas they have deployed B12 bomber. That's why market calm and won't test the March low. April 8 marked that point when Powell made an oath "We will do anything"! Including buying corporate junk bond ETF for the first time in history. In the next recession they would be buying stock like BOJ. Basically market is controlled by punditocracy.
Currently FED is pumping $1M per second. FED $6T balance sheet is barely 29% US GDP, they can unleash $20T without sweating. Don't fight the FED.
foreignpolicy.com/2020/04/29/federal-reserve-global-economy-coronavirus-pandemic-inflation-terminal-deflation-is-coming/
FED can expand their balance sheet even beyond 100% of US GDP. Currently federal government debt is 107% of US GDP. This is different than FED balance sheet in US GDP percentage. The later is FED's own debt not federal government. Remember that FED and federal government are two separate entities. FED is owned by 12 private banks aka pundits. They're the one controlling the market. Even before the creation of FED these banks have been manipulating the market since the end of civil war. The creation of FED simply legalized them to print fiat currency on behalf of federal government. BOJ and ECB already at maximum capacity so they are relying on FED. FED just announced that they will start buying corporate junk bonds ETF on Tuesday May 12. The House also announced $3T third stimulus package. This is why market rally. Any attempt to short is futile as no individual retail investor can compete with FED's $20T B12 bomber. Ed Yardani in last week CNBC interview explain why FED has many weapons. Instead of lowering interest rate to negative which would harm banks, FED simply need to expand their balance sheet by $250B which is equivalent with reducing interest rate by 25 bps. This is equivalent with FED's ability to cut rate 80 times without going to negative rate by simply expanding their balance sheet. This assuming they will stop at 100% US GDP which I doubt. Pundits are high on opium won't stop. By expanding their balance sheet by $20T more they're technically give boost to the economy equivalent with -20.00% interest rate cut.
www.visualcapitalist.com/worlds-money-markets-one-visualization-2017/
Inflation won't kick in as this will be absorbed in $1,400T of derivatives. As long as derivatives are growing faster than inflation then net balance, this is why inflation is dead.
seekingalpha.com/article/198197-why-derivatives-caused-financial-crisis
This is why gold will and ought to collapse for Modern Monetary Theory to work.
seekingalpha.com/article/4338742-looming-derivative-crisis
This is sad but it's the reality. People only have two options, stay on sideline with market going higher or join. Humans only know one type of economy, socialism. Either communism or punditocracy. Unless you have an alternative this is the only economy known to mankind.
Market movers will keep grinding up to burn any put options until June contract expires. Anyone buying put is like telling market movers to keep grinding up until expiration to make profit. Remember market movers can borrow money at 0% interest rate profiting from put that expires. Many people were betting May 2019 repeating. When many people expecting something to happen market movers will prevent it. Goldman Sach forecast 20% correction in August. That's more likely possible due to second phase of spreading in Fall. Goldman Sach forecast economy won't recover until 2023.
www.philstockworld.com/2020/05/18/goldman-quietly-cuts-q3-q4-eps-forecasts-now-values-market-off-2023-earnings/
Market is rallying by pricing in Trump will win reelection. Imagine if Biden win then FED need to raise interest rate, increase corporate tax, no stock buyback, and increase capital gain tax. What would you think happen if market believe Trump will lose? Market will sell off hard without parachute. All of this rally is based on the assumption that FED remain printing money at 0% interest rate under Trump administration. August will be crucial for Trump reelection and second wave of spreading in Fall
The only unaccounted variable that pops to mind is that in 1917, there was no safety net such as unemployment, stimulus checks, welfare, food stamps. What does that mean? It means that in 1917 folks had no choice but to go to work and take their chances. At present, we have had a good chunk of folks who have not been working for 2 to 3 months and they have spent their monies on toilet paper, paper towels, and cans of chili.
So it will be interesting to see the GDP numbers for the quarter and compare that to the 1% growth, that you researched.
So will that be a fork in the road. I don't know. But, I am leaning toward your way of thinking. The FED will continue printing. The disconnect will become larger.
Wow this is a really interesting analysis. Do you have a blog or something? I'd read it!
Appreciate your effort. Very interesting and very helpful.
Damn longest RUclips comment I’ve ever read. Interesting points
Thank you ! Amazing analysis
They are missing just one thing, some stocks were not hurt in this new economy , mainly eccomerce. Take AMZN for example they had growth in revenue , so you could argue there bussniss wasn’t hurt despite lower gdp etc
Oh this is gonna end badly...
And t minus 1 week til the next crash
I guess business don't need workers to produce goods to sell to consumers anymore so no correlation at all between services and value. 🤔
We really don't need to work or produce while we can get away with buying the products overseas by just printing dollars for that matter. Now... for how long, that's the quadrillion dollars question.
is someone frying a cheese buger in the audio ? 1:20..1:40
It’s crazy the disconnect. 🧐Rug pull when?
Can't people just be happy that the exchange rate between US dollar bills and sheets of toilet paper is heading towards 1:1? 😂
The same thing happend in Venezuela. Stock market and hyperinflation skyrocketed at the same time.
The demand side is lagging? The supply side is BROKEN! No amount of printed money can fix this problem.
They think demand drives everything. Well gee, there’s sure a lot of demand for masks but where’s the supply?
It should be 100% illegal for the FED to interfere in any stock market, PERIOD. Price discovery has to be the most important thing valued in markets.
Did someone say 2008?
There were a few red 15 min candles today. jay!!! We need moar.
No sh*t, we noticed this months ago.
Sp500 & Nasdaq will reach a new all time high in few weeks .
Yes, to the moon. But what if it begin to go down? Fed can not continue forever. Fed probably continue until coming November elections. 2021 would be horrible.
I'm so glad he thinks it's not tied and that it's bullish now I can buy stocks when they crash. When the news was saying everything was dropping as I knew it was going up. When has the news ever predicted the market? They're reactionary.
Which is actually a good thing!
If the stock market goes down, people will lose money, people feel bad and they will even tighten their wallets to spend. It will be a viscous cycle.
no correlation? ok
Three things to do.... buy precious metals (each day gold and silver aren’t at all time highs is a gift). Get into real estate at low rates at deals right now before inflation hits (property values will skyrocket with inflation, once this happens, Fed will have to raise rates and property values and rates will BOTH be high. Gtfo of CASH
Tax cuts for the rich were a great idea before the pandemic. Here is why.
1. Our grand children will now have to pay for the recovery efforts
2. Our children will now enjoy higher prices and lower wages
3. Corporate bailouts that children will be paying for
Free stuff from the free stuff is 100X worse that printing money
No one is going to be paying the money that the fed pumped in
Nice graph manipulation making it seem like the recovery of fake market isn't as dramatic from the low in march
Wow
So he is saying what most people with common sense knew for decades.
Stock market is not a measure of the economy.
fed just making people BELIEVE that the economy is working. this entire rally is driven by BELIEF... dip will come soon enough.
His last sentence was a drop-the-mic boomer!
It's mind blowing 133 likes of Rosenberg who has been wrong as long as I can remember. I'm sorry for your missing out following a permabear
QQQ, the leading US market is 2% off ath, and it's still just a bear market rally according to Rosenberg. If we get ath, what is it called? "Bear market all time high"?
Big whoop, the Fed is printing at ridiculous rates that’s the only reason the market is going up. Ultimately the economy has be in good shape for any of that to matter in the long wrong. We have one of the worst economies in history, companies are levered to the max and if you’d take a look at a lot of their balance sheets and read what they are saying, they don’t even think they are recovering any time soon.
Fed is the market
demonstrate that the SP500 will reach new highs even if there are no Americans working or buying, The stock market is a force upon itself. Sp500 should be its own nation.
this guy had puts
FED is buying everythong
Huh?
What?
@@peterl.104 eh
Metaphor vs literality: Watch language usage, such as “adrenalin” vs “liquidity.”
Why am I the only one thankful we are not yet and most likely will never be in that dark place the left wing media want us to be in.
#BUYBITCOIN