I don't understand why the U.S stock market isn't going down.

Thrugelmir

AnotherJoe wrote: »

:rotfl::rotfl::rotfl:
You might want to take a look at the history of the "big investment firms" and the mystical knowledge and ability you grant them that allows them to "pull the trigger and cash out and buy back later."
Financial wizards like Bear Sterns, Lehman Brothers, Merrill Lynch, HBOS blah blah blah I don't want to spend too long typing
Though I will mention LTCM, based on work from a Nobel winning economist. Lost maybe 5 billion dollars in less than 5 months
I recommend a couple of films for you, The Big Short and Margin Call.
Or TL;DR these guys have LESS clue than the Average Joe or even Another Joe about what's happening.

Bear Sterns suffered a lack of confidence not liquidity. Barclays traded Lehmans book out a considerable profit. HBOS's issues with risk management at board level are well documented.

Thrugelmir

Prism wrote: »

However an outside influence will be the reason that causes the next crash - the kind that very few predict.

Reading a research paper tonight. A few things of note were highlighted. As US major companies (market cap over $700m) are required to file detailed financial information on a quarterly basis.

The top 34 companies in the S&P 500 accounted for 43% of the indexes market capitalisation at the 30th September 2019. This exceeds the market value as accounted for by the bottom 438.

Historically the S&P trades on a PE of around 14 times. The top 34 (at 30/09) were trading on a p/e of 28 times.

Oracle bought $5 billion of it's own stock in the quarter. On a year to year comparison made EPS appear to rise 10%. Yet year on year profit has fallen 5%.

Excluding Disney , which has a 30/09 year end. The other 33 major stocks overall recorded a 2% decline in profitability in the quarter. Likewise the reported figure for free cash flow generation was down 28%.

Worth remembering that the S&P also suffered a correction in 2002 of 49.1%. Besides 2009's 56.1%.


Far more going on than one would imagine. Much of which maybe masking the true position of some companies. Until they report year end numbers.

bostonerimus

The FED seems quite happy with growth and inflation, unemployment appears low, wages are rising and consumer confidence is high. That's all floating stocks, but tariffs, government borrowing, income inequity and all the money that has been injected into the economy over the last decade are bound to pop the bubble at some point. I predict there will be a crash...I just don't know when.