Small doubt with GDP and stock market

[Jombo0108]

ooru basha lo matladkundam 

GDP ante value of goods and services,  let’s call GDP as overall health of a country’s economy 

stock market is where people buy and sell shares of companies.

 Market lo trade ayee companies eyy kada GDP ki contributors (amount other things)

if GDP is dropping meaning the value of economy is dropping how come stock market is growing???

entha fake market ayina, aren’t there checks and balances?? 

 

 

[Spartan]

•    he is there.. no balancing needed

[Jombo0108]

3 minutes ago, Spartan said:

•    he is there.. no balancing needed

To what extent ani nayokka idi 

[chittimallu_14]

idi chala tough Q.. .dheeniki answer pillavadni aina neno... musali vadu aina psycopk no cheppalem.. medhavi aina @TrollBait narsi ravalasindhe

[DummyVariable]

18 minutes ago, Jombo0108 said:

 

 Market lo trade ayee companies eyy kada GDP ki contributors (amount other things)

 

No.

Market lo trade ayye companies are public companies. There will be more private companies that are not listed.

[sri_india]

22 minutes ago, Jombo0108 said:

ooru basha lo matladkundam 

GDP ante value of goods and services,  let’s call GDP as overall health of a country’s economy 

stock market is where people buy and sell shares of companies.

 Market lo trade ayee companies eyy kada GDP ki contributors (amount other things)

if GDP is dropping meaning the value of economy is dropping how come stock market is growing???

entha fake market ayina, aren’t there checks and balances?? 

 

 

Stock market is forward looking machanisam, and always has disconnect with econamy... Ex:  Ford has lot of history and sales but future is electric cars so value for Tesla.... same as when a single corona case announced in USA market collapsed as future looks not good .... Now even 1000s of deaths , market keep growing as many promising (even pump and dump) Medicine and vaccine on the way...

[DummyVariable]

13 hours ago, sri_india said:

Stock market is forward looking machanisam, and always has disconnect with econamy... Ex:  Ford has lot of history and sales but future is electric cars so value for Tesla.... same as when a single corona case announced in USA market collapsed as future looks not good .... Now even 1000s of deaths , market keep growing as many promising (even pump and dump) Medicine and vaccine on the way...

True that stock markets in a sense are measuring future expectations. However, even the future values are misleading. If it were so easy then we could simply say that the economy lags the stock market. The reality is that stock prices reflect profits and not revenues and all these profits do not create added value. Investment opportunities can swing the share prices too - inverse relationship between interest rates and investment spending.  So the stock market could be doing well, but the economy may not be.

[Jombo0108]

46 minutes ago, DummyVariable said:

True that stock markets in a sense are measuring future expectations. However, even the future values are misleading. If it were so easy then we could simply say that the economy lags the stock market. The reality is that stock prices reflect profits and not revenues and all these profits do not create added value. Investment opportunities can swing the share prices too - inverse relationship between interest rates and investment spending.  So the stock market could be doing well, but the economy may not. 

i'm accepting this as answer to my quest. 

[AndhraneedSCS]

Stock Market in this case is ahead by 3 months:

 

For example, in March, Stock market fell by about 35% and in Q2 (April-June), GDP fell by about 32%.  

Its not an apple to apple comparison though, the reason:

 

Companies that are stock market listed (most restaurant  companies) filed for a secondary shares and got needed liquidity to weather the pandemic. Some small mom and pop restaurants don't have money had to close. 

The result is more demand for big stock market listed (and big) companies while small small companies are closing permanently. This will lead to stocks going up and up and are diverting completely from real economy as a whole. Same with Amazon, Walmart and Target (for example).