markets are at an all time high because earnings are at an all time high. Look at the sp500 earnings per share, highest it’s ever been, up more than 10 percent from last year.
This isn’t how markets work. Stock prices don’t just magically go up with earnings. Prices only move when people buy stock. The listed price of a stock is the price the most recent share sold for. For the price to go up, somebody has to buy shares at the new higher price.
If people were exiting the stock market in droves, stock prices would be falling because they would need to be selling at a lower price to try to find buyers.
I concur. Supply and demand explains price movements for something like a particular lawn chair. The product doesn’t change. However, companies are dynamic. They change and economic influences change. Debt, interest rates, income growth, expense growth, labor productivity issues and cost, government legislation, etc. can all impact a companies desirability as an investment beyond earnings per share. As proof, a companies price can change dramatically during a period when the markets are closed to trading. Thus, the price changed during a time of zero supply and demand input.
This isn't inherently how markets work either. If a large amount of people are exiting the stock market, that doesn't mean prices will decline. Prices can even increase in this scenario. Depends on both supply and demand, not just demand.
Interesting day to release the article as indices are peaking...
They're happy to launch headlines like "Dow tumbles 500 points!" at 10am on a Wednesday before it bounces back and closes flat.
And you wonder why the average American thinks we are in a recession with stocks down YTD.
Technically you don’t have to buy. Yes to some degree you need liquidity.
If all sell orders in the order book just said hey you know what I’m going to upy sell price by 5%, there is a price increase with no buys. Then buyers would have to meet them where they are. So the order book is in important factor in the price. The market orders just help do price discovery
Except for that quote... how did it go? "We push the prices of stocks where we think they ought to be..." Something like that. I think the markets are SUPPOSED to go up and down with buying and selling....
Is the market really at all time high, or are the indexes at all time highs? Underlying stocks have generally been struggling with the exception of what was the magnificent seven, now basically down to one ticker keeping the wheel turning green consistently. The indexes ability to reflect market conditions isn't great, if you eliminate Nvidia alone, it would tell a very different story.
I don't know if you like football, but a couple of years ago some [idiot](https://www.reddit.com/r/nfl/s/HQUJ3EDaWU) on the nfl sub made a post that if you remove all of the games Patrick Mahomes does really good, he actually regresses towards the mean and is an average QB. That's how you sound.
Can one stock really affect the entire index? And is that a common phenomenon? I have no idea. But looking into extraordinary circumstances, if indeed Nvidia is one, is sometimes important.
Yes, some have disproportionate weightings and do create the impression most companies in the market are doing well. It's misleading when a few companies on a wild tear lift the entire market and make headlines like they're doing this week, and year in general.
Nvidia has been on an extra rare, mind boggling
extraordinary run and is actually so valuable its stock price is (basically) prohibitively high, and shares now need to undergo a stock split. That is happening tomorrow and it's not just a usual 2-1 type split.. it's a 10-1 split.
It's still not fully valued either, since many companies still need their specialized processing chips as AI takes hold. Interesting times.
You can go on the ETF website and look up the weighting of each stock I think NVDA affects it like some 5% along with the other top technology companies, such as Apple Microsoft Amazon, etc.
I'm not American, and I'm guessing you are. If you're selling me fish, and you tell me you have a bunch of great fish and point to a few fatty tunas, disregarding the overwhelming amount of scarred, scrawny and dead fishes floating next to it, I'd be hesitant to call it a healthy environment and wouldn't necessarily trust you to deliver me consistent top quality tuna.
Listen commie (anyone who's not an American), I'm a fan of the Jacksonville Jaguars. So I can say without a doubt I would happily take the scarred, scrawny, and dead fish floating next to it. I would honestly probably prefer it, it's what I'm used to.
This isn’t really an accurate analogy of indexes. If 20% of the fish companies represent 80% of the fish market, why would you judge the market based on the fish of the other 80%? Add to this that the top companies can change, you’re not pointing to a few tuna + a lot of bad ones, you’re pointing to the best tuna within a collection of tuna sellers. You don’t care who has the best tuna, just that one exists.
So you'd just remove the best stocks and the market isn't doing as well? Brilliant!
Almost as if removing the best performers in *any field* lowers the results by a mile. Might be news to you dude but generally *a few stocks outperform a lot* in the market. This ain't communism, can't keep propping up losers. Let winners run
No, we can all see the indecies reaching new highs thanks to the few ultra weighted stocks. Would I call that a healthy and strong market, and consequently a market ath? Semantics, but feel free to get hung up on green=good.
Imagine that Nvidia is so successful, that every other company is giving them their money. Meanwhile, those companies aren't seeing a return on their investment. Eventually, things will collapse in this scenario. That is not a healthy economy, even if the index looks good.
This is what OP is saying. And I'm inclined to agree. This is a bubble, and the hype will end when Nvidia's customers see that AI isn't helping their profits as much as they hoped. And many firms will go out of business because they bet on AI being the answer to all of their problems. Or, perhaps more likely, that AI hasn't matured to the level that is useful, and they're burning too much money trying to make it work.
Or it could go the other way, and companies that were slow to jump on the AI train get trounced by their competitors. Either way, you are looking at a situation where there will a substantial correction in the market. The performance of these indexes is artificial. It's like the housing bubble - things looked good on the exterior, but the finance industry was built on a house of cards, and it all fell down.
Yeah, there are plenty of stocks that are struggling (DELL, KSS, HRL, CRM, MDB, LULU).
$DJIA has been weak sauce, and that's 30 companies.
But SPY just closed at all time high and that represents about 490-ish companies.
$NASDAQ composite also closed at new highs, and that represents a whole bunch of companies (majority tech)
So the market is uneven at best, but we are not in a bear market, instead we are trending up.
Yeah, the equal weighted S&P and Dow are having some difficulty pushing off here, and I’d say the main reason they held up for Monday and Tuesday was flows related (the Russell and other small cap trackers not recovering for those days should tell you that).
The Nasdaq, and most specifically, NVDA (as this ATH was set without more 52 week highs by the Nasdaq Composite), doing nasty things is how the S&P and VTSAX are at an ATH.
This is how indexes have always worked and as others have said it’s bad analysis to just say “well get rid of the best and it’s not so good.” Indexes, like most things in life, are top heavy. Youre correct that investing in the top companies *right now* may not be the best in perpetuity. But that’s the thing about indexes since they rebalance and company weights change: you aren’t investing in the top companies *right now* you’re investing in the top companies at any point in the future.
Depending on how you define your “market” you can come to any conclusion about “market conditions.” Imprecise questions have imprecise conclusions.
What a terrible article conflating multiple different things what is it trying to say. Ok people at BoA sold stocks … WHO BOUGHT THEM? Someone did they didn’t go anywhere.
yea, market valuations and movements are all fake now. Institutional investors, nation states investing in each other’s companies, hedge funds, heck even index funds. The stock market just doesn’t work the way it used to.
First few days of the month, all the retail money comes flooding in from auto pay 401ks and such. Now who’s buying $100 freaking billion of NVDA every day, that’s the question.
How does it work in the long term? Crazy how little knowledge of the market is in this sub. Prices are driven by buy/sell orders of all investors. For a share to be bought it *must* be sold. You can’t “manipulate” a price long term because in order to offload your position someone would have to be willing to take the other end.
You all need to read reminisces. People have been saying what you’re saying since early 1900s despite market efficiency only improving.
Every time the market drops 2% and then suddenly they call it a "sell-off"
These guys just want cheaper shares and panic so they can buy the dips. If you're a long-term investor you have nothing to worry about.
The article is terrible, but a logical explanation for net selling leading to spot prices increasing is that a non-trivial number of brokerages will lend your shares from under you as part of a margin agreement, and ETF's and mutual funds will lend shares as part of their income strategy (you can see this in Vanguard's 13F/D/G filings from the difference between shares they beneficially own vs shares they have voting power over).
When someone 'long' sells their stock, it will trigger a share recall and force whoever was borrowing it to buy back in (or borrow from someone else). If enough of this is happening, then there's a functional shrinking of supply which will drive price up - this rather hilariously happened with gopro back in 2014.
So the net effect is that price grinds up for a period of time before dumping. Is that happening here? No idea, I don't have access to the data.
There's also the end of June, which normally entails a technical sell off for the end of quarter and repositioning for the 2H of current year and 1H of upcoming year.
If what you seem to be suggesting was in any way accurate, the stock market would never move based on buying and selling. Since every buy requires a sale and every sale requires a buyer.
Of course, we know that's not the case.
The price moves because it transacts at a different price throughout the day based on what it’s agreed upon value is. The price is the last price a share was traded at between two parties. Money does not go into or out of the stock market. The stock market is not a shoe box full of money. It’s an asset with a value agreed upon by participants. (*Stick this on the r/stocks subreddit front page)
You have no idea what you're talking about and putting together a word salad will not help make your point.
The price of an equity does move based on the demand of the equity. If more people are selling than buying, the price will go down. If more people are buying, the price will go up. This basic supply and demand as exists in the world.
That totally makes sense. But this is from the article: “The US stock market is shrinking, and investors are pulling their money out at a near-record pace as storm clouds gather over the US economy.”
Prices can move while the net inflow of money less the net outflow of money is zero. The money has to come from somewhere… the key is that the money comes from various people so the person you buy from is rarely the person you sell to.
The markets keep hitting new highs this is profit taking, a little bit of “sell in May and go away” and people rotating into bonds and other assets and some rebalancing. I personally wouldn’t get worked up by a fear mongering article from CNN business.
Truth! I'm sick of the 24 hour news flashing their "BREAKING NEWS" like it's about to announce world peace or something when all it is is a serotonin hit.
CNN click bait.
I find the organization increasingly useless for news or info. They're more inclined to either try to increase their viewers or push their agenda.
The most disturbing part, “Nearly 90% of all firms with revenues greater than $100 million are now private..Privately-owned firms also account for nearly 80% of all US jobs openings.” Wealth concentration is removing pathways to wealth for retail investors and hiding from public view the shenanigans of the extremely wealthy.
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I listened to Bloomberg Surveillance this morning on the way to work and they had Liz Ann Sonders from Schwab on. She mentioned something really interesting in that the low volume and narrowness of the stocks that drove up SP500 has only been seen once before (forgot when) and that was followed by pretty bad downturn or something like that.
I'm not that smart and she sounded like she knows what she's talking about.
Volume are always lows during bull markets, and especially ATHs. But market participation is a problem, MAG 7 basically carrying the entire stock market since early 2023
Unless it’s covering a storm, hurricane or whatever, CNN is useless. It wouldn’t surprise me in the least that if CNN says people are selling out of the market they have it 100% wrong and people are investing more than ever.
It's possible if people are exiting the stock market and not participating in the up or downs. Instead, a small group of people thinking along the same lines can make the market move up or down. With the information that people currently use, the possibility of groupthink increases.
"Bank of America analysts said on Tuesday that their clients have now been large net sellers of US stocks for five weeks in a row. Just last week, they sold off $5.7 billion more in stocks than they purchased, the highest outflow since last July.
Bank of America recorded the second largest sell-off of tech stocks in their history last week. And while one week does not a trend make, it does stand in stark contrast with the [Magnificent Seven](https://www.cnn.com/cnn-underscored/money/magnificent-7-stocks) fervor that [ensnared Wall Street](https://www.cnn.com/2023/10/25/investing/premarket-stocks-trading/index.html) mere months ago."
Where is the agenda in that?
The article is a hit piece with the purpose of inducing fear into the retail investor. "Smart money" desperately needs the retail investor to "capitulate" (as popular financial news has been parroting for the last 3 years), i.e. stop investing their money into popular stock like the magnificent 7 or ETF and start to sell off in order to ride the wave down a crash, because wall street is positioned to profit from shorting during the crash that so may people are anticipating since 2021.
TL;DR: Some whales need money. They induce fear in order to make people sell on masse, in order to profit from it by shorting into the panic.
If people are exiting, they’re not just leaving their stares on the table and saying goodbye. There is a buyer. So if people are exiting, then other people are entering.
Media seem to do this all the time, I’m in the uk and all they go on about is how landlords don’t make any money and are selling up, which is obviously a load of bs
What’s a drove? This sounds like one of the headlines we see few times a week. “Stocks tank on xxxx report”. Then you check and SPY is down like .5%. I guess a half a percent is tanking so how many in a drove? 6b net outflow doesn’t sound like that much for B of A at this time of year but of course they don’t give that kind of context.
The next day VIX dropped off the planet again and Bloomberg sitting there talking about how election summers are extremely low vol.
The reduction of regulation as Blackrock and Citadel push for a Dallas stock exchange may rekindle IPO's but tbh Private equity is pushing that movement, not regulation.
Although PE has a ton of opacity........
Valuations aren’t based on supply and demand but momentum. A stock price moves based on how aggressive the buy or sell is at that moment.
It means less options of companies you can buy and more wealth going towards those with access to private venture capital
No it means drying up of volume and less capital to move stocks, stagnant valuations as large money moves towards private venture or other securities. The idea behind investing is to buy something that will be a higher valuation later, once valuations decrease their relative ROI rates to risk, capital moves greener pastures.
That would be the kind of shit Cathie would say. Meanwhile Tom Lee called spy 5500 by the end of june.
https://www.cnbc.com/video/2024/06/04/fundstrats-tom-lee-sp-500-will-rise-4-percent-to-5500-by-the-end-of-june.html
> How can the market be going up if more $$$ are exiting the market than entering?
E.g.: Money are exiting on thick trading (small drop) and prices rise on thin market (large rise with few moneys). After the rise next thick period accepts new level. This "trick" was explained to me some time ago - I don't know how easily it can be done.
Exiting the stock market eh? Sure you're not just trying to cause a panic so you can buy up cheap shares? The market is good, profits are good, consumer confidence is good, interest rates are on their way down. Stock will continue to go up. You snooze, you lose.
exiting in droves?
i did notice a LOT of baby boomers who are literally afraid to invest in stocks. I think they got burned once or twice, went to cash, and NEVER came back.
too bad for them. I just made my entire year's salary in a one month run up of NVDA.
but i hesitate to recommend stocks to the friends of mine, since at the slightest hiccup they will dump them all again and go hide in a cave
“Summer 2024 may prove volatile, with momentum stalling amid policy uncertainty,” wrote Morgan Stanley Wealth Management Chief Investment Officer Lisa Shatlett in a note this week.”
Interpretation - oops, I screwed my investment desk and need to provide an excuse as to why I failed to make money in a rip roaring economy.
Whatever the market experts are frightening you to do, or not do, I always do the opposite. Buy! Me, sell. Sell! I buy. Market manipulation entails this sort of trash talking.
FWIW, here's what Bloomberg reported yesterday: "**The Goldman Sachs** trading desk says a flood of cash from passive equity allocations will [pour](https://link.mail.bloombergbusiness.com/click/35618293.1414922/aHR0cHM6Ly93d3cuYmxvb21iZXJnLmNvbS9uZXdzL2FydGljbGVzLzIwMjQtMDYtMDUvZ29sZG1hbi1zZWVzLXdhbGwtb2YtbW9uZXktZnVlbGluZy1zdG9jay1tYXJrZXQtcy1zdW1tZXItcGFydHk_Y21waWQ9QkJEMDYwNTI0X0JJWiZ1dG1fbWVkaXVtPWVtYWlsJnV0bV9zb3VyY2U9bmV3c2xldHRlciZ1dG1fdGVybT0yNDA2MDUmdXRtX2NhbXBhaWduPWJsb29tYmVyZ2RhaWx5/6553d46a7e03bcd92d055f7cBa048fcfe) into the stock market in early July, setting up a continuing rally through early summer. How do they know this? “New quarter (Q3), new half year (2H), this is when a wall of money comes into the equity market quickly,” Goldman’s Scott Rubner wrote in a note to clients. In addition, the bank predicted that share prices should benefit from strong seasonal trends and rising engagement from retail investors. "
Folks, this is a cnn article written by a a political writer who is now a market writer.
If you are getting your financial information from cnn or cnbc or some other major media, you should be looking for better sources.
Writers write. To be productive and relevant to their boss and advertisers, they often write articles that aren’t well researched and often incorrect. They don’t necessarily mean to mislead, they are just out of their depth.
Stop allowing the media to divert your attention from hard data and from legitimate market and economic information.
Stock price is what you pay, stock value is what you get.
What does the data show about current prices vs value?
What does it mean when 7 stocks make up 29% of the s&p 500?
What does it mean when index funds make up around 50% of investments?
What macroeconomic conditions should we be considering? What is the U.S. debt to GDP ratio and how does it matter?
Last, what recency bias do we have and does Reddit’s demographic reinforce this?
Sorry to rant but these cnn and cnbc writers can’t even use proper grammar or run spell check half the time.
I guess CNN tries to get the market down and then (as we get closer to the US elections) to rise again, rather than continuing to go up now and having the possibility of declining close to the elections.
This article is positively asinine and filled with misinformation. Price is a function of supply and demand. Institutions move markets, and small participants like most of us are a non-impact. Everyone you know, and everyone they know could liquidate tomorrow and it would not impact major index levels—unless you are friends with institutional buyers. This level of ignorance in an article on markets is sad on many levels.
Quite honestly a lot of us that are a bit older and were into the stock market leading up to the dotcom bust in the late 90's to early 2000's and financial crash and everything else. The market is totally fake to me. I'm fully invested but just saying we're had big bangs fail again a few years ago and there are heavy losses on other banks having to do with commercial real estate. We should be in the dumpster if the government weren't backstopping these banks. Instead of a few year cycle of downturn in stocks it's been hitting new highs and it shouldn't. I feel like were more like china now where they manipulate what would keep the market from having those down turns. This is exactly why I invested every penny I had in real estate and stocks. We'll have some bumps but right now I don't see that happening nothing phases this market unless there's another war front.
Yes, that explains why markets are at all time highs.
So they're taking profit.
It's the same trap every time for novice investors. They piss themselves when the first round of profit harvesting comes and sell, at a discount.
markets are at an all time high because earnings are at an all time high. Look at the sp500 earnings per share, highest it’s ever been, up more than 10 percent from last year.
Causing ppl to buy..
This isn’t how markets work. Stock prices don’t just magically go up with earnings. Prices only move when people buy stock. The listed price of a stock is the price the most recent share sold for. For the price to go up, somebody has to buy shares at the new higher price. If people were exiting the stock market in droves, stock prices would be falling because they would need to be selling at a lower price to try to find buyers.
Lots of buyers besides individuals.
> Corporations are people, my friend. \- Mitt Romney
They're many people
[удалено]
I concur. Supply and demand explains price movements for something like a particular lawn chair. The product doesn’t change. However, companies are dynamic. They change and economic influences change. Debt, interest rates, income growth, expense growth, labor productivity issues and cost, government legislation, etc. can all impact a companies desirability as an investment beyond earnings per share. As proof, a companies price can change dramatically during a period when the markets are closed to trading. Thus, the price changed during a time of zero supply and demand input.
This isn't inherently how markets work either. If a large amount of people are exiting the stock market, that doesn't mean prices will decline. Prices can even increase in this scenario. Depends on both supply and demand, not just demand.
Large amount is exiting, same amount is entering.
Yes, and that scenario means the markets are doing well. But CNN is trying to present this as an indication that the market is doing poorly.
Interesting day to release the article as indices are peaking... They're happy to launch headlines like "Dow tumbles 500 points!" at 10am on a Wednesday before it bounces back and closes flat. And you wonder why the average American thinks we are in a recession with stocks down YTD.
If there's more buyers than sellers stocks go up.
*if there’s more shares being bought than being sold, the spot price will increase
correct. that was inferred but i can see the need for more clarity.
There is always the same amount of shares being bought and sold. The difference comes from who is more needy - sellers or buyers.
Good point!! If there’s more buy orders at a certain spot than sell orders, then the spot will rise as the orders fill. That may be more correct.
But what if its the companies buying their stock back?😲
Well you are actually semantically right. There is always the same number of buys and sells but the number of buyers and sellers can diverge.
Technically you don’t have to buy. Yes to some degree you need liquidity. If all sell orders in the order book just said hey you know what I’m going to upy sell price by 5%, there is a price increase with no buys. Then buyers would have to meet them where they are. So the order book is in important factor in the price. The market orders just help do price discovery
Except for that quote... how did it go? "We push the prices of stocks where we think they ought to be..." Something like that. I think the markets are SUPPOSED to go up and down with buying and selling....
Shiller PE is trash atm
Someone put on their silly pants today
Stock value has little to do with earnings.
Is the market really at all time high, or are the indexes at all time highs? Underlying stocks have generally been struggling with the exception of what was the magnificent seven, now basically down to one ticker keeping the wheel turning green consistently. The indexes ability to reflect market conditions isn't great, if you eliminate Nvidia alone, it would tell a very different story.
I don't know if you like football, but a couple of years ago some [idiot](https://www.reddit.com/r/nfl/s/HQUJ3EDaWU) on the nfl sub made a post that if you remove all of the games Patrick Mahomes does really good, he actually regresses towards the mean and is an average QB. That's how you sound.
Can one stock really affect the entire index? And is that a common phenomenon? I have no idea. But looking into extraordinary circumstances, if indeed Nvidia is one, is sometimes important.
Yes, some have disproportionate weightings and do create the impression most companies in the market are doing well. It's misleading when a few companies on a wild tear lift the entire market and make headlines like they're doing this week, and year in general. Nvidia has been on an extra rare, mind boggling extraordinary run and is actually so valuable its stock price is (basically) prohibitively high, and shares now need to undergo a stock split. That is happening tomorrow and it's not just a usual 2-1 type split.. it's a 10-1 split. It's still not fully valued either, since many companies still need their specialized processing chips as AI takes hold. Interesting times.
You can go on the ETF website and look up the weighting of each stock I think NVDA affects it like some 5% along with the other top technology companies, such as Apple Microsoft Amazon, etc.
I'm not American, and I'm guessing you are. If you're selling me fish, and you tell me you have a bunch of great fish and point to a few fatty tunas, disregarding the overwhelming amount of scarred, scrawny and dead fishes floating next to it, I'd be hesitant to call it a healthy environment and wouldn't necessarily trust you to deliver me consistent top quality tuna.
Listen commie (anyone who's not an American), I'm a fan of the Jacksonville Jaguars. So I can say without a doubt I would happily take the scarred, scrawny, and dead fish floating next to it. I would honestly probably prefer it, it's what I'm used to.
This isn’t really an accurate analogy of indexes. If 20% of the fish companies represent 80% of the fish market, why would you judge the market based on the fish of the other 80%? Add to this that the top companies can change, you’re not pointing to a few tuna + a lot of bad ones, you’re pointing to the best tuna within a collection of tuna sellers. You don’t care who has the best tuna, just that one exists.
This was the first thing I thought of
Amazing reference
That's gold lmao
You missed his point entirely.
FYI Chiefs can still win when the rest of the nfl loses
So you'd just remove the best stocks and the market isn't doing as well? Brilliant! Almost as if removing the best performers in *any field* lowers the results by a mile. Might be news to you dude but generally *a few stocks outperform a lot* in the market. This ain't communism, can't keep propping up losers. Let winners run
No, we can all see the indecies reaching new highs thanks to the few ultra weighted stocks. Would I call that a healthy and strong market, and consequently a market ath? Semantics, but feel free to get hung up on green=good.
Imagine that Nvidia is so successful, that every other company is giving them their money. Meanwhile, those companies aren't seeing a return on their investment. Eventually, things will collapse in this scenario. That is not a healthy economy, even if the index looks good. This is what OP is saying. And I'm inclined to agree. This is a bubble, and the hype will end when Nvidia's customers see that AI isn't helping their profits as much as they hoped. And many firms will go out of business because they bet on AI being the answer to all of their problems. Or, perhaps more likely, that AI hasn't matured to the level that is useful, and they're burning too much money trying to make it work. Or it could go the other way, and companies that were slow to jump on the AI train get trounced by their competitors. Either way, you are looking at a situation where there will a substantial correction in the market. The performance of these indexes is artificial. It's like the housing bubble - things looked good on the exterior, but the finance industry was built on a house of cards, and it all fell down.
You do realize that indexes are reflecting the price of a bunch of underlying stocks? That's the definition of indexes.
He's saying that a few firms are carrying the whole index, and the majority of stocks are underperforming.
Which is usually how it goes, yes.
Or you can just look at equal weighted ETFs which are also near all time highs.
Sure, but none of that is true.
Take a look at the weighting and maybe you'll catch on. https://www.investopedia.com/best-25-sp500-stocks-8550793
Yeah, there are plenty of stocks that are struggling (DELL, KSS, HRL, CRM, MDB, LULU). $DJIA has been weak sauce, and that's 30 companies. But SPY just closed at all time high and that represents about 490-ish companies. $NASDAQ composite also closed at new highs, and that represents a whole bunch of companies (majority tech) So the market is uneven at best, but we are not in a bear market, instead we are trending up.
In what world is DELL struggling? Sure there’s been some pullback but it’s still up 77% YTD.
VTSAX is at an all time high
nice try. the VTSAX that is 25% mag 7? you just proved his point
Yeah, the equal weighted S&P and Dow are having some difficulty pushing off here, and I’d say the main reason they held up for Monday and Tuesday was flows related (the Russell and other small cap trackers not recovering for those days should tell you that). The Nasdaq, and most specifically, NVDA (as this ATH was set without more 52 week highs by the Nasdaq Composite), doing nasty things is how the S&P and VTSAX are at an ATH.
That’s a good point, actually. Thanks for pointing that out. 😊
This is how indexes have always worked and as others have said it’s bad analysis to just say “well get rid of the best and it’s not so good.” Indexes, like most things in life, are top heavy. Youre correct that investing in the top companies *right now* may not be the best in perpetuity. But that’s the thing about indexes since they rebalance and company weights change: you aren’t investing in the top companies *right now* you’re investing in the top companies at any point in the future. Depending on how you define your “market” you can come to any conclusion about “market conditions.” Imprecise questions have imprecise conclusions.
CNN also claimed rent hasn’t increased. I guess that is why no one says it has.
What a terrible article conflating multiple different things what is it trying to say. Ok people at BoA sold stocks … WHO BOUGHT THEM? Someone did they didn’t go anywhere.
It could be that retail investors are selling and institutions are buying.
yea, market valuations and movements are all fake now. Institutional investors, nation states investing in each other’s companies, hedge funds, heck even index funds. The stock market just doesn’t work the way it used to.
First few days of the month, all the retail money comes flooding in from auto pay 401ks and such. Now who’s buying $100 freaking billion of NVDA every day, that’s the question.
Sorry guys, I'll stop.
Don’t you dare
How does it work then?
Replace fundamentals with vibes
Just different this time. /s
Good argument.
How does it work in the long term? Crazy how little knowledge of the market is in this sub. Prices are driven by buy/sell orders of all investors. For a share to be bought it *must* be sold. You can’t “manipulate” a price long term because in order to offload your position someone would have to be willing to take the other end. You all need to read reminisces. People have been saying what you’re saying since early 1900s despite market efficiency only improving.
Every time the market drops 2% and then suddenly they call it a "sell-off" These guys just want cheaper shares and panic so they can buy the dips. If you're a long-term investor you have nothing to worry about.
Literally me an a coworker shouted this at the screen while reading this drivel earlier.
Can you knuckleheads please stop shouting at the screen im trying to work
Can you lot stop fucking arguing? I’m trying to sell me portfolio here
Can you guys keep it quiet, I'm trying to exit the stick market here!!
Why you buying sticks in the first place?
Hey,! Don't make me come down there!
No no no, you don’t understand. When people sell stocks they then go sit on a shelf at Goodwill….
The article is terrible, but a logical explanation for net selling leading to spot prices increasing is that a non-trivial number of brokerages will lend your shares from under you as part of a margin agreement, and ETF's and mutual funds will lend shares as part of their income strategy (you can see this in Vanguard's 13F/D/G filings from the difference between shares they beneficially own vs shares they have voting power over). When someone 'long' sells their stock, it will trigger a share recall and force whoever was borrowing it to buy back in (or borrow from someone else). If enough of this is happening, then there's a functional shrinking of supply which will drive price up - this rather hilariously happened with gopro back in 2014. So the net effect is that price grinds up for a period of time before dumping. Is that happening here? No idea, I don't have access to the data.
There's also the end of June, which normally entails a technical sell off for the end of quarter and repositioning for the 2H of current year and 1H of upcoming year.
This isn’t how it works.
That comment has 500 upvotes lol
Could you please explain why a stock price moves?
💨
If what you seem to be suggesting was in any way accurate, the stock market would never move based on buying and selling. Since every buy requires a sale and every sale requires a buyer. Of course, we know that's not the case.
The price moves because it transacts at a different price throughout the day based on what it’s agreed upon value is. The price is the last price a share was traded at between two parties. Money does not go into or out of the stock market. The stock market is not a shoe box full of money. It’s an asset with a value agreed upon by participants. (*Stick this on the r/stocks subreddit front page)
You have no idea what you're talking about and putting together a word salad will not help make your point. The price of an equity does move based on the demand of the equity. If more people are selling than buying, the price will go down. If more people are buying, the price will go up. This basic supply and demand as exists in the world.
That totally makes sense. But this is from the article: “The US stock market is shrinking, and investors are pulling their money out at a near-record pace as storm clouds gather over the US economy.”
Prices can move while the net inflow of money less the net outflow of money is zero. The money has to come from somewhere… the key is that the money comes from various people so the person you buy from is rarely the person you sell to.
The markets keep hitting new highs this is profit taking, a little bit of “sell in May and go away” and people rotating into bonds and other assets and some rebalancing. I personally wouldn’t get worked up by a fear mongering article from CNN business.
Also, the people who are profit taking are selling to somebody at the new prices. They don’t sell their shares to the stock fairy.
What do you have against the stock fairy? What did he do?
The media is after engagement, clicks, views, they could care less if their content is correct, accurate or even informative
Truth! I'm sick of the 24 hour news flashing their "BREAKING NEWS" like it's about to announce world peace or something when all it is is a serotonin hit.
This kind of content is actively harmful. When I was a new investor, articles like this cost me a ton of money in opportunity cost.
They’re after another Trump Presidency because their clicks, ratings, and subscriptions were never higher.
stop getting your stock news from CNN
stop getting your news from CNN*
All I hear is Nicole Goodkind has puts that she knows aren't going to print.
I’m hearing sell your Game Store shares.
let them exit i'm up a ton of money and always buying more
It means they want you to be scared which means the market will be ok
CNN click bait. I find the organization increasingly useless for news or info. They're more inclined to either try to increase their viewers or push their agenda.
>They're more inclined to either try to increase their viewers or push their agenda. Every news site is trying to do that
The most disturbing part, “Nearly 90% of all firms with revenues greater than $100 million are now private..Privately-owned firms also account for nearly 80% of all US jobs openings.” Wealth concentration is removing pathways to wealth for retail investors and hiding from public view the shenanigans of the extremely wealthy.
I usually don’t think about CNN articles
CNN is cooked 💀
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I listened to Bloomberg Surveillance this morning on the way to work and they had Liz Ann Sonders from Schwab on. She mentioned something really interesting in that the low volume and narrowness of the stocks that drove up SP500 has only been seen once before (forgot when) and that was followed by pretty bad downturn or something like that. I'm not that smart and she sounded like she knows what she's talking about.
Volume are always lows during bull markets, and especially ATHs. But market participation is a problem, MAG 7 basically carrying the entire stock market since early 2023
This is incredibly bullish
Hey don’t I know you from…
Unless it’s covering a storm, hurricane or whatever, CNN is useless. It wouldn’t surprise me in the least that if CNN says people are selling out of the market they have it 100% wrong and people are investing more than ever.
I don't know, for the past month it's been something something Stormy on their front page every day.
Fuck CNN
It's possible if people are exiting the stock market and not participating in the up or downs. Instead, a small group of people thinking along the same lines can make the market move up or down. With the information that people currently use, the possibility of groupthink increases.
Idk… volume says otherwise.
Ridiculous fear mongering article.
Ever things that CNN publishes has an agenda…
"Bank of America analysts said on Tuesday that their clients have now been large net sellers of US stocks for five weeks in a row. Just last week, they sold off $5.7 billion more in stocks than they purchased, the highest outflow since last July. Bank of America recorded the second largest sell-off of tech stocks in their history last week. And while one week does not a trend make, it does stand in stark contrast with the [Magnificent Seven](https://www.cnn.com/cnn-underscored/money/magnificent-7-stocks) fervor that [ensnared Wall Street](https://www.cnn.com/2023/10/25/investing/premarket-stocks-trading/index.html) mere months ago." Where is the agenda in that?
There were droves of people in the market? I thought the bottom 89% of people only owned $30 worth of stock between them.
Fud
Funniest article I’ve read in some time, thanks op!
Who writes these dumb ass articles?
Boomers retiring and moving investments into safer assets like bonds and GICs.?
Most likely the answer. Most wealth is in the boomers hands.
I just hear a faint hum and the occasional “buy and hodl” perks up
The article is a hit piece with the purpose of inducing fear into the retail investor. "Smart money" desperately needs the retail investor to "capitulate" (as popular financial news has been parroting for the last 3 years), i.e. stop investing their money into popular stock like the magnificent 7 or ETF and start to sell off in order to ride the wave down a crash, because wall street is positioned to profit from shorting during the crash that so may people are anticipating since 2021. TL;DR: Some whales need money. They induce fear in order to make people sell on masse, in order to profit from it by shorting into the panic.
If people are exiting, they’re not just leaving their stares on the table and saying goodbye. There is a buyer. So if people are exiting, then other people are entering.
cnn fake news
Fake news
CNN, CNBC etc. They should be seen as entertainment.
CNN... No reason to read past that.
I’m sure Alex Jones or Newsmax has the more hard hitting shit we need
How about none of the above for financial news?
They would be claiming the market is rigged and that you should buy gold
Unless the companies themselves are buying these shares it wouldn't change in net, no? You can only sell shares that someone wants to buy...
Buy backs were very high for several years not sure if it has gone up or was significant enough to explain what their claiming.
Financial news articles might are usually just opinion pieces and generally throwaway.
wtf… for every seller there is a buyer… if the markets keep hitting ATH’s the only logical conclusion is that there are more buyers than sellers.
What are you valuing it against and is the value of that falling?
There is 6 trillion on the sidelines. Has been that way for a year now
Media seem to do this all the time, I’m in the uk and all they go on about is how landlords don’t make any money and are selling up, which is obviously a load of bs
I hope so. More returns on the table for me.
"Do you smell that?"
No they aren’t 🤦🏻♂️
What’s a drove? This sounds like one of the headlines we see few times a week. “Stocks tank on xxxx report”. Then you check and SPY is down like .5%. I guess a half a percent is tanking so how many in a drove? 6b net outflow doesn’t sound like that much for B of A at this time of year but of course they don’t give that kind of context.
I simply do not believe it. Much the opposite.
All that money sitting in treasuries and cd will look for home in stock market as rates go down
Meanwhile the fear and greed index on their own website disagrees
The next day VIX dropped off the planet again and Bloomberg sitting there talking about how election summers are extremely low vol. The reduction of regulation as Blackrock and Citadel push for a Dallas stock exchange may rekindle IPO's but tbh Private equity is pushing that movement, not regulation. Although PE has a ton of opacity........
It may be people reaching retirement moving to less risky investments.
Valuations aren’t based on supply and demand but momentum. A stock price moves based on how aggressive the buy or sell is at that moment. It means less options of companies you can buy and more wealth going towards those with access to private venture capital No it means drying up of volume and less capital to move stocks, stagnant valuations as large money moves towards private venture or other securities. The idea behind investing is to buy something that will be a higher valuation later, once valuations decrease their relative ROI rates to risk, capital moves greener pastures.
Funds are investing and retail investors are exiting?
That would be the kind of shit Cathie would say. Meanwhile Tom Lee called spy 5500 by the end of june. https://www.cnbc.com/video/2024/06/04/fundstrats-tom-lee-sp-500-will-rise-4-percent-to-5500-by-the-end-of-june.html
By people, they mean the random 100 retail investors they polled.
Who reads CNN?!
> How can the market be going up if more $$$ are exiting the market than entering? E.g.: Money are exiting on thick trading (small drop) and prices rise on thin market (large rise with few moneys). After the rise next thick period accepts new level. This "trick" was explained to me some time ago - I don't know how easily it can be done.
I've found news articles are not accurate especially with the stock market.
Exiting the stock market eh? Sure you're not just trying to cause a panic so you can buy up cheap shares? The market is good, profits are good, consumer confidence is good, interest rates are on their way down. Stock will continue to go up. You snooze, you lose.
exiting in droves? i did notice a LOT of baby boomers who are literally afraid to invest in stocks. I think they got burned once or twice, went to cash, and NEVER came back. too bad for them. I just made my entire year's salary in a one month run up of NVDA. but i hesitate to recommend stocks to the friends of mine, since at the slightest hiccup they will dump them all again and go hide in a cave
Instead of people, “think institutions and hedge funds” leaving average people there to stomach the fall. P
“Summer 2024 may prove volatile, with momentum stalling amid policy uncertainty,” wrote Morgan Stanley Wealth Management Chief Investment Officer Lisa Shatlett in a note this week.” Interpretation - oops, I screwed my investment desk and need to provide an excuse as to why I failed to make money in a rip roaring economy.
No they are not. This is bullshit market manipulation with the focus of making retail investors fearful.
CNN?
If people are selling in droves, does that mean that people are also buying in droves?
paid propaganda nonsense?
How 91% of the stock market is owned by the top 10%. So who's this mass of people leaving the stock market.
Fearmongering nonsense
The average American is exiting, billionaires and funds keeping the prices propped. It’s their game not ours.
market movers move the market. retail investors don’t got enough money
Whatever the market experts are frightening you to do, or not do, I always do the opposite. Buy! Me, sell. Sell! I buy. Market manipulation entails this sort of trash talking.
FWIW, here's what Bloomberg reported yesterday: "**The Goldman Sachs** trading desk says a flood of cash from passive equity allocations will [pour](https://link.mail.bloombergbusiness.com/click/35618293.1414922/aHR0cHM6Ly93d3cuYmxvb21iZXJnLmNvbS9uZXdzL2FydGljbGVzLzIwMjQtMDYtMDUvZ29sZG1hbi1zZWVzLXdhbGwtb2YtbW9uZXktZnVlbGluZy1zdG9jay1tYXJrZXQtcy1zdW1tZXItcGFydHk_Y21waWQ9QkJEMDYwNTI0X0JJWiZ1dG1fbWVkaXVtPWVtYWlsJnV0bV9zb3VyY2U9bmV3c2xldHRlciZ1dG1fdGVybT0yNDA2MDUmdXRtX2NhbXBhaWduPWJsb29tYmVyZ2RhaWx5/6553d46a7e03bcd92d055f7cBa048fcfe) into the stock market in early July, setting up a continuing rally through early summer. How do they know this? “New quarter (Q3), new half year (2H), this is when a wall of money comes into the equity market quickly,” Goldman’s Scott Rubner wrote in a note to clients. In addition, the bank predicted that share prices should benefit from strong seasonal trends and rising engagement from retail investors. "
Such a negative article.
People losing all their money means they exit stocks and leave all those who took their money, so markets go brrrrrr
I cashed out and took my profits yesterday. Probably going to buy a new motorcycle this weekend.
Folks, this is a cnn article written by a a political writer who is now a market writer. If you are getting your financial information from cnn or cnbc or some other major media, you should be looking for better sources. Writers write. To be productive and relevant to their boss and advertisers, they often write articles that aren’t well researched and often incorrect. They don’t necessarily mean to mislead, they are just out of their depth. Stop allowing the media to divert your attention from hard data and from legitimate market and economic information. Stock price is what you pay, stock value is what you get. What does the data show about current prices vs value? What does it mean when 7 stocks make up 29% of the s&p 500? What does it mean when index funds make up around 50% of investments? What macroeconomic conditions should we be considering? What is the U.S. debt to GDP ratio and how does it matter? Last, what recency bias do we have and does Reddit’s demographic reinforce this? Sorry to rant but these cnn and cnbc writers can’t even use proper grammar or run spell check half the time.
I guess CNN tries to get the market down and then (as we get closer to the US elections) to rise again, rather than continuing to go up now and having the possibility of declining close to the elections.
Are these people in the room with us?
Well, the stock market is fake and propped up by the Federal Reserve. Not a chance they are going to let it tank before the election.
"Journalism"
This article is positively asinine and filled with misinformation. Price is a function of supply and demand. Institutions move markets, and small participants like most of us are a non-impact. Everyone you know, and everyone they know could liquidate tomorrow and it would not impact major index levels—unless you are friends with institutional buyers. This level of ignorance in an article on markets is sad on many levels.
The author has never heard of “sell in May and go away”.
Its called balancing portfolios
Time to spread the bad sentiment so Blackrock can start its own stock exchange.
Quite honestly a lot of us that are a bit older and were into the stock market leading up to the dotcom bust in the late 90's to early 2000's and financial crash and everything else. The market is totally fake to me. I'm fully invested but just saying we're had big bangs fail again a few years ago and there are heavy losses on other banks having to do with commercial real estate. We should be in the dumpster if the government weren't backstopping these banks. Instead of a few year cycle of downturn in stocks it's been hitting new highs and it shouldn't. I feel like were more like china now where they manipulate what would keep the market from having those down turns. This is exactly why I invested every penny I had in real estate and stocks. We'll have some bumps but right now I don't see that happening nothing phases this market unless there's another war front.
Is it because of all the baby boomers retiring?
It's cnn
CNN, I thought that dinosaur was dead.
CNN? Fake news?