Skip to main content

Why the Stock market is rallying

Due to fears of the corona virus pandemic the stock market plummeted to never seen before lows. However by the first week of June the stock market rallied and gained over 38 percent of what it had lost.  Experts suggest that the stock market should be in tandem with the economy of the country, but that does not seem to happen. Even with the economy in doldrums the stock market continues to rally to new highs. The basic function of the stock market  for the 400 years that it has been around is to raise capital and provide an economic impetus to the businesses.


There are stock exchanges all over the world out of which the NSE being he largest companies of more than 21 trillion dollars in value listed.After the great depression countries around the world woes smaller retail investors to come forth and buy stocks. The idea to relate the happiness of the people to the stock market was profound and was sold to the public. As the stock market would rise people would get happier and buy more stock which would further increase the prices of the stocks. The stock prices were therefore  a measure of the psychological states of people more than the asset value. This theory applies even to the current situation. So  how people buying the stocks if there is no money in the economy and the businesses are not doing so well.


Governments are putting money into the hands of the people by introducing stimulus and bail out packages. Governments are spending money which they do not have. Assets owned by the country are being sod along with corporate and Government bonds. Governments are printing money thereby increasing the inflation levels  without having any assets to back the spending.


Indices which list technology companies have also seen a similar fate. The indices of these stocks only rallied when Government introduced a stimulus package even though these companies are the top contenders  for doing extremely well during the pandemic as tech companies have got the most boost during this crises. The reality seems however very different and poles apart.

Comments

Post a Comment

Popular posts from this blog

Work-Life Balance: Following Your Heart

 Work-Life Balance: Following Your Heart Work-life balance has become a pivotal aspect of modern living, as individuals strive to find equilibrium between their professional commitments and personal well-being. In this pursuit, the concept of "following your heart" holds significant value, suggesting that aligning one's career choices and daily routines with their passions and interests can lead to a more harmonious and fulfilling life. The traditional view of work often emphasized a linear path of climbing the corporate ladder and dedicating long hours to one's job. However, this approach frequently led to burnout, strained relationships, and a general dissatisfaction with life. Recognizing these challenges, a paradigm shift has occurred, with more people recognizing the importance of integrating personal aspirations into their professional journeys. Following your heart, in the context of work-life balance, involves making career decisions that resonate with your tr...
Post a Comment
Read more

Savings and Subsidies in India

In the recent years the rising inflation has given rise to a number of problems in India including the snatching away of the risk taking ability of able Indians as well as creating a plethora of financial woes. The 14 % Inflation in India is due to the rise of prices of Vegetables. The rise of prices of vegetables is due to extreme seasonal weather.As per the data from NSO there has been an increasing rise of prices even in the core inflation group which  does not include fuel, food and school. Though there have been continuous efforts to bring the inflation levels down  it has been in vain. In todays times, it high time the Government takes immediate measures to increase consumption by not only increasing the rate of interest on fix deposits and other Financial Instruments but also by taking active steps by cutting corporate as well as individual taxes. If we look at the consumption patterns in some Gulf or western countries the consumption pattern has been on an upwa...
2 comments
Read more

Everything is Pink

Watched the movie 🍿 🎬🎥🎞️ #Barbie, where “everything is Pink”, and beneath the pink (all things nice 👌👌) lies the stereotypical Barbie (woman)as the Protagonist,  it showed how in the patriarchal 💁‍♂️👬system, women are stereotyped and portrayed 🎨🖼️💅🎨as either one thing or the other, being continuously labelled and judged 👩‍⚖️🧑‍⚖️, either known by their profession 👩‍🏭🕵️‍♀️👩‍💼👩‍🌾👷‍♀️👩‍🚀👩‍🚒👩‍🎨, their family name or the role they play in their household 🏠🏡 Masked beneath their roles and gender defined culture lies a real human 🙋‍♀️, a woman with feelings 🥰, a woman with an ambition 🏆🏆, a woman with an identity of her own 🪪🆔 Beautifully described through every girls favourite doll 🎎🪆, the movie Barbie brings out these aspects of womanhood 👩‍🏭👩‍🏭👩‍🌾otherwise swept under the carpet, which largely tend to lose importance in society. It addresses the reality of life where every woman in subject to  👧 real world problems and that inclusion an...
Post a Comment
Read more