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As US stock market hits new highs, 2 of 3 Americans are cutting back on spending, survey shows (apnews.com)
submitted 4 months ago by to c/aboringdystopia@lemmy.world
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WASHINGTON (AP) — U.S. consumer confidence declined slightly this month as gas prices stayed high and inflation remained elevated, a sharp contrast to soaring stock prices hover near record levels.

The Conference Board’s consumer confidence index slipped 0.7 points to 93.1 in May, the first decline after three months of gains. The measure hasn’t fallen as much this year as other gauges of consumer attitudes, but it has been stuck at a low level since the pandemic. Before COVID-19, it regularly reached 130.

A separate gauge of consumer sentiment released last week by the University of Michigan fell to a record low this month. Soaring gas and food costs have worsened inflation that is outpacing the average growth in paychecks, reducing most Americans’ purchasing power. Americans have soured on President Trump’s economic policies, polls show, potentially creating problems for Republicans heading into the midterm elections.

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[–] 4 points 4 months ago (5 children)

Yeah that edit is what a lot of people don't always realize

If a company jumps up a ton in market cap, that doesn't mean the equivalent amount has been paid for its' stock. Long term holders came in at much lower prices after all. It's the current price (which depends on what people are willing to buy/sell for right now, aka the order book) multiplied by all the shares that exist, including ones that may not have been sold in a decade in the case of some company like nvidia.

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  • [–] 1 point 4 months ago* (4 children)

    This is true but generally that money is still functionally real because it can be spent, even if in some sense it's "socially constructed". Similarly banks don't have all the cash on hand, but no one would argue that the money in your account isn't real.

    To put it clearer terms: when the markrt cap goes up, stock owners can buy more stuff. Where's the stuff coming from?

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  • [–] 1 point 4 months ago (2 children)

    Part of it is spendable, but definitely not most. If everyone wants to sell, the stock is not worth anything anymore. There have to be people left holding.

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  • [–] 2 points 4 months ago

    Vast majority of gains on the market will be reinvested in the market. As long as more money in going into the market then coming out the demand to supply ratio will raise stock prices over all. There is not currently a better place to put all that money then the market currently, and as long as this is true the cycle continues.

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