Stock market trend vs Oil Price - saying very different things

Discussion in 'Markets & Economies' started by openeyes, Apr 28, 2020.

  1. openeyes

    openeyes Well-Known Member Silver Stacker

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    I am looking at the S&P 500 trend this year and comparing this to the Oil price. They are saying very different things in my opinion. The oil price says the economy is slumping and there is no recovery. The stock market is saying that things are looking up and we will all be back to normal soon enough.

    With Apple reporting that they will reduce IPhone production by 20% and other companies reporting expectations of Q2 earnings to be at least 20% lower it is hard to see the stock market holding current levels.

    upload_2020-4-28_12-33-10.png upload_2020-4-28_12-32-12.png
     
  2. OneDay

    OneDay Active Member

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    I'd stick with the oil price as the indicator. Its physical.

    It's going to be a very bumpy road ahead!
     
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  3. NaturesProphet

    NaturesProphet Member

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    I want to short the S&P500 so bad but the odds are just incredibly against you in so many ways.
    Yes in reality it should fall but we have come a long, long way from reality and there are more forces trying to keep it that way than the alternative.
     
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  4. Jason1

    Jason1 Well-Known Member

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    It should be crashing hard right now. But the thing is, we are in an era where companies that are in billions $ of debt and have never made a single cent of profit are companies in high demand and considered top stocks with investors lol. eg tech companies.
    So I guess taking that into account its not surprising really that the market has held up so much.
    Its almost like investors dont give a shit any more of the real world issues, and companies not making a profit, It is something they seem tobe used to.
    Its madness
     
    Last edited: Apr 28, 2020
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  5. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Nothing unusual, people are just using stocks to park "wealth", just as some of us are using gold and silver which has no yield. But at least tech stocks can make money in the future if they slash their labour costs and capex which they can easily do so. Even more exorbitant is why would people pay millions for a concrete to house 4-6 people?

    Real estate is an even bigger ponzi than stocks.
     
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  6. Jason1

    Jason1 Well-Known Member

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    Or once many of tech companies blow investors money by continuing to grow debt they crash and investors lose all your money. History has shown that tobe case when people ignore things like profit and loss for extended periods of time.
    But the type of investors in these are to young to remember thats what happens.

    then you have those payment loan companies which the same sorts of investors love. Those companies hand out sub prime loans to pretty much every one, doesn't matter if they are unemployed or have low paying jobs and cant afford to pay those loans back. Doesnt matter here is some money for some shit you cant afford to buy. Yet they just give those people more and more money and investors dont questions how the company stands when these clearly subprime loans arent repaid, especially in the current climate where un employment is so bloody high and likely going to get worse.
    But people dont give a shit, which really resembles the tech crash of the 2000's nd also 2008 where people ignore the obvious signs that the maths doesn't ad up.

    as for the rest of your statement on housing and PM, Not arguing any of that, as its off topic. so not getting into that topic.
     
    Last edited: Apr 28, 2020
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  7. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Have to agree that many stocks, especially tech, are still overvalued, especially the "cloud" arena which I think is risky.
     
  8. Ipv6Ready

    Ipv6Ready Well-Known Member Silver Stacker

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    I don't think techs are over valued at all, (note: I don't think of Apple and Amazon as tech stocks), especially with two years of social distancing on the cards

    Also lithium stocks and green energy stocks are undervalued as this period of clean air in China will drive further the need for clean air energy in China ie the middle class won't want smog in the cities.
     

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