Uploaded June 2020 | Updated September 2026, 2 hours ago
In this video we show you the reasons why the stock market is rising while the economy is falling. Very weird times, let's delve into it!
š Sven Carlin (Expert Investor) Portfolio & Free Investing Course: bit.ly/SvenCarlinPortfolio
š How To Invest Course: bit.ly/theinvestingacademy-how-to-invest-in-the-stock-market
__________________________________
My 2nd Investing YouTube Channel: youtube.com/channel/UC6qBTYqQpXqLutg39ZgXcJQ
Subscribe Here: bit.ly/2Y1kNq8
For those who have been keeping track of the economy and the stock market, Iām sure you would have noticed, something very weird has been happening.
So on one hand you look at the stock market and youād think weāre in the most productive stage possible. Over the last 2 months it is up by 35%!
However when you look at the economy how much businesses are actually producing, that is down. In the first quarter of 2020, the economy has shrunk by 4.8%, and in the 2nd quarter itās predicted to shrink by a further 30%.
So itās very weird times that weāre in. the stock market, the way people price businesses is up massively, but those businesses are producing less. And not just a little bit less, a whole lot less compared to last year and other previous years. What I want to do in this video is answer why! Why is this contradictory behavior happening!?
Let me explain. You see the way we measure how the economy is going, is through a figure called GDP. Gross Domestic Product. This measures the total value of goods produced and services provided in a country during one year.
As you can see up until 2019 this was growing at a steady rate. The economy was doing what it was supposed to do, and that is producing more and more each year. Until 2020 comes along, and something that no one could have ever predicted occurred.
A illness swept throughout the world, causing governments to take extreme action. Citizens were forced to stay at home. Businesses had to shut, and the economy basically halted in its tracks. This is whatās known as a black swan event.
Now, because people werenāt buying as much & businesses were shut, nothing was getting produced. So Gross domestic product, GDP, the figure that measures the economy went down dramatically! As I mentioned earlier itās down 4.8% in the first quarter of 2020 for USA. This number is expected be -30% in the 2nd quarter of this year. (2)
But Obviously itās not just the USA thatās been affected. Itās the whole world. The reason that we always use the USA as the benchmark is because it is the biggest economy.
As you can see this is GDP by country for 2017. USA is by some margin the biggest economy compared to everyone else. And the 2020 figures arenāt going to be looking nice, we can say that for sure.
But itās not just the USA thatās been affected. China the 2nd largest economy in the world thatās obviously been affected as well. They had a massive halt in terms of the economy. Itās the same with Germany, Italy, the UK etc. The virus has impacted all of these countries. But letās bring our focus back to the USA.
The USAās economy is down and what we also need to mention, so is employment. People have lost a lot of jobs due to this poor economy.
As you can see the unemployment claims were normal at the start of this year. And then the end of March, April comes along and spike, the benefit claims shot up. It almost hit the 7 million mark in one week. As I say very interesting times.
Unemployment is now sitting at 14.7%. Which is up from just 3.5% at the start of this year. So I think itās fair to say that economically weāre all battling.
But now we need to move on to the second part of the equation which is the stock market. The stock market, after itās initial dip, is now up over 35%!
The S & P 500 has climbed almost 800 points, starting to come close to the all time high at 3,036 points.
The Dow Jones similar story itās up almost 7,000 points, to a total of 25,500.
And USAās last major index is also up. Itās up by over 400 points, over the past 2 months.
___
DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.
In this video we show you the reasons why the stock market is rising while the economy is falling. Very weird times, let's delve into it!
š Sven Carlin (Expert Investor) Portfolio & Free Investing Course: bit.ly/SvenCarlinPortfolio
š How To Invest Course: bit.ly/theinvestingacademy-how-to-invest-in-the-stock-market
__________________________________
My 2nd Investing YouTube Channel: youtube.com/channel/UC6qBTYqQpXqLutg39ZgXcJQ
Subscribe Here: bit.ly/2Y1kNq8
For those who have been keeping track of the economy and the stock market, Iām sure you would have noticed, something very weird has been happening.
So on one hand you look at the stock market and youād think weāre in the most productive stage possible. Over the last 2 months it is up by 35%!
However when you look at the economy how much businesses are actually producing, that is down. In the first quarter of 2020, the economy has shrunk by 4.8%, and in the 2nd quarter itās predicted to shrink by a further 30%.
So itās very weird times that weāre in. the stock market, the way people price businesses is up massively, but those businesses are producing less. And not just a little bit less, a whole lot less compared to last year and other previous years. What I want to do in this video is answer why! Why is this contradictory behavior happening!?
Let me explain. You see the way we measure how the economy is going, is through a figure called GDP. Gross Domestic Product. This measures the total value of goods produced and services provided in a country during one year.
As you can see up until 2019 this was growing at a steady rate. The economy was doing what it was supposed to do, and that is producing more and more each year. Until 2020 comes along, and something that no one could have ever predicted occurred.
A illness swept throughout the world, causing governments to take extreme action. Citizens were forced to stay at home. Businesses had to shut, and the economy basically halted in its tracks. This is whatās known as a black swan event.
Now, because people werenāt buying as much & businesses were shut, nothing was getting produced. So Gross domestic product, GDP, the figure that measures the economy went down dramatically! As I mentioned earlier itās down 4.8% in the first quarter of 2020 for USA. This number is expected be -30% in the 2nd quarter of this year. (2)
But Obviously itās not just the USA thatās been affected. Itās the whole world. The reason that we always use the USA as the benchmark is because it is the biggest economy.
As you can see this is GDP by country for 2017. USA is by some margin the biggest economy compared to everyone else. And the 2020 figures arenāt going to be looking nice, we can say that for sure.
But itās not just the USA thatās been affected. China the 2nd largest economy in the world thatās obviously been affected as well. They had a massive halt in terms of the economy. Itās the same with Germany, Italy, the UK etc. The virus has impacted all of these countries. But letās bring our focus back to the USA.
The USAās economy is down and what we also need to mention, so is employment. People have lost a lot of jobs due to this poor economy.
As you can see the unemployment claims were normal at the start of this year. And then the end of March, April comes along and spike, the benefit claims shot up. It almost hit the 7 million mark in one week. As I say very interesting times.
Unemployment is now sitting at 14.7%. Which is up from just 3.5% at the start of this year. So I think itās fair to say that economically weāre all battling.
But now we need to move on to the second part of the equation which is the stock market. The stock market, after itās initial dip, is now up over 35%!
The S & P 500 has climbed almost 800 points, starting to come close to the all time high at 3,036 points.
The Dow Jones similar story itās up almost 7,000 points, to a total of 25,500.
And USAās last major index is also up. Itās up by over 400 points, over the past 2 months.
___
DISCLAIMER: It's important to note that I am not a financial adviser and you should do your own research when picking stocks to invest in. These are just some of my viewpoints, by no means would I recommend watching one YouTube video and then immediately buying that stock. This video was made for educational and entertainment purposes only. Consult your financial adviser.
