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This Is Biden’s Soft Landing, and He Deserves Some Credit (newrepublic.com)

submitted 11 months ago by MicroWave@lemmy.world to c/politics@lemmy.world

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The last time this happened, voters didn’t credit Bill Clinton. That may be a bad omen, or a good one.

If the stock market chose presidents, Joe Biden would be a shoo-in for reelection in 2024. The market rallied this month amid growing optimism about the economy, with the S&P 500 zooming 1.9 percent Tuesday on news that the consumer price index rose only 3.2 percent in October (compared to 3.7 percent in September). Stocks rallied again Wednesday on news that the producer price index fell 0.5 percent. Commentators are no longer debating whether the economy will experience a “soft landing” (i.e., a reduction in inflation without recession). The only question now is when it will arrive. The S&P 500 seems to have decided it’s already here.

But the stock market doesn’t choose presidents. Voters do, and polls continue to show they think the economy is in terrible shape. A Financial Times–Michigan Ross Nationwide Survey conducted November 2–7 is absolutely brutal on this point.

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[-] Ranvier@sopuli.xyz 1 points 11 months ago* (last edited 11 months ago)

That's a gross over simplification to the point of being untrue. Besides the obvious facts that many companies continue to issue new shares on a regular basis, companies absolutely care about their stock prices for a variety of reasons, and not just so stockholders make money.

Start here if you really want to know more about how a company leverages its stock price, even when not selling more shares at the moment.

https://www.investopedia.com/investing/why-do-companies-care-about-their-stock-prices/

https://www.usatoday.com/story/money/columnist/krantz/2012/10/14/falling-stock-price-hurt-investors-company/1624761/

https://fairmontequities.com/how-does-a-decline-in-share-prices-affect-companies/

[-] SmoothIsFast@citizensgaming.com 1 points 11 months ago

many companies continue to issue new shares on a regular basis,

Not that often really, because shareholders can vote on those propositions and they generally would rather open a short position and gain back their investment then speculate on future growth prospects that are looking shaky needing more investment. More common in massive companies, you see share buybacks to entice big investors with the allure of we are doing well so we will buy back shares periodically to raise your investment. They do it enough and eventually as an investor you know they are going to offer more shares at some point so that control of the board does not become too consolidated, start a short position at that point wait for the next bottom and buy in before the next buyback to play both sides.

[-] hark@lemmy.world 1 points 11 months ago

Except stock price is based on a number of factors and does not necessarily match demand.

this post was submitted on 19 Nov 2023

277 points (86.7% liked)

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