Stock markets disconnect?

Bruckner

Watching the stock markets it looks like they are currently moving opposite to or ignoring the economic outlook. 
Today the WTO issued a statement that global trade is now forecast to fall by up to a third. 
US markets and Nikkei all up again!
Are the markets no longer much influenced by economic outlooks?

afis1904

Markets have already priced in a lot of the economic fallout of this as it was quite obvious a while ago. The current movements might be down to the recovery plans of some companies as well as the plateauing of virus cases and deaths in some countries although that's just speculation

dunstonh

Watching the stock markets it looks like they are currently moving opposite to or ignoring the economic outlook. 

No they are not.  The markets fell around 35% due to the economic outlook and uncertainty.  However, as the uncertainty has been reduced (through government stimulus around the world) the markets have risen again.

Remember that share prices are not all about now.  They include future profits. Sometimes reflecting decades ahead.

Today the WTO issued a statement that global trade is now forecast to fall by up to a third. 
US markets and Nikkei all up again!

Nothing wrong or unusual there.

Are the markets no longer much influenced by economic outlooks?

The markets have factored in what they believe is happening.    They knew the economic impact long before the WTO issues a statement.

Prism

The markets tends to react very quickly to events and sometimes overcompensates. Its basically a group prediction of what might happen in the future. WTO reports are more thoroughly calculated but take time to create. The market might then adjust somewhat to take this new information into account before heading off in its own direction again 

EdGasketTheSecond

It's just a mug's rally before the next lurch down. If you look at charts of the big crashes you will see similar rallies while overall the market goes lower for a long time.

port_of_spain

DunningKrugerTheSecond said:

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dunstonh

EdGasketTheSecond said:

It's just a mug's rally before the next lurch down. If you look at charts of the big crashes you will see similar rallies while overall the market goes lower for a long time.

Not correct.  Each period of similar losses is different.  Sometimes recoveries are quick. Sometimes recoveries are slow.  Sometimes there is a short sharp drop, sometimes long and drawn out.  Sometimes there are single dips, double dips or treble dips or more. 
There is no way to tell what is coming.   We know you don't like investing in equities and promote gold and silver but it doesn't mean you can give false information to people here who may take what you say at face value.

coffee_prince

Just remember the stock market isn't the economy. Short term this stimulus is pumping things up, we'll see later on when things return to normal what the economy is really like.

Halabala9

Forget about old Warren Buffet advice, P/E, CAPE, earnings, unemployment etc. Bots that are trading billions of $ these days don`t bother about such details. The behaviour of FED and other central banks since last crisis in 2009, namely a decade of extremely low interest rates and money pumping, completely disturbed all the factors that used to describe companies that "are worth it" or not. What they did over the last month just added more to this situation - FED 2 trillion $ with info that will be more if needed, Japan 1 trillion $, UK 620 billion £, Europe around 1 trillion $ as well - with such money flying around we can sit at home for 12 months and the market will go up anyway.

The stock market these days is a casino where you just bet on red or green. My favourite example is Ryanair, they have got the whole fleet grounded till at least end of May and even after that, not many people will be travelling for a long time anyway, yet their share today costs more than over the most of 2019 when they were operating normally. There is a lot more of such examples. Sorry but what is priced in such share like Ryanair here? What is priced in USA stocks that are just absurdly overpriced these days?

Crisis meant to "clean the market" from badly managed companies but how can that happen when such companies like Boeing etc. have got guarantied bailouts no matter what? What I am trying to say is stock exchange these days is not representing the economy but only emotions, it basically became a casino with above-mentioned betting on red and green, so if you don`t accept this, better stay away. They will do literally everything to keep the market green till Trump`s election.

EdGasketTheSecond

I think you will find that casino's usually have red and black numbers to bet on making that the almost binary choice with just one green, 0. If you are talking markets then red and blue are the colours; don't know where you get green from?

Halabala9

EdGasketTheSecond said:

I think you will find that casino's usually have red and black numbers to bet on making that the almost binary choice with just one green, 0. If you are talking markets then red and blue are the colours; don't know where you get green from?

From Yahoo Finance charts if that's so important to use "blue" instead of "green"...