*** Official Politics Shitposting Thread ***

[Poopadoop]

Goldman Sachs and Wells Fargo stocks have gone up ~25% since the election. So obviously they're feeling very comfortable with Trump in charge.

Can someone explain how that helps the average person?

[wufwugy]

Goldman Sachs and Wells Fargo stocks have gone up ~25% since the election. So obviously they're feeling very comfortable with Trump in charge.

Can someone explain how that helps the average person?

They have very broad holdings, and what their holdings represent go far beyond what they are explicitly.

If there's an activity (like a deregulation) in the housing market and then a bank with a large proportion of its assets in housing sees a stock rally, this means that investors view the housing market as a whole as increasing in respective value. The cynic may look at that and just think that it benefits the bank because the rally is in that bank's stock, but what's really going on is the rally in the bank's stock is coming from the value increase in the market itself, which is made up of homeowners themselves, whose home values are expected to rally. This means that that activity that initially sparked the rally benefits the individual homeowner.

Furthermore, it means that particular activity benefits every sector of the economy since benefiting homeowners on average means their demand for other products services will increase.

The DJIA tracks 30, yes 30 stocks

Those 30 are good enough to show the effect I described above. Those 30 companies are selected specifically to best represent the economy as a whole.

[CoccoBill]

Those 30 are good enough to show the effect I described above. Those 30 companies are selected specifically to best represent the economy as a whole.

You're right. Pretty much the only people who disagree with that are economists, who tend to criticize the DJIA heavily and favor S&P500 or Wilshire5000.

[BananaStand]

Goldman Sachs and Wells Fargo stocks have gone up ~25% since the election. So obviously they're feeling very comfortable with Trump in charge.

Can someone explain how that helps the average person?

They're the firms responsible for financing economic growth. They're the ones loaning out the money to support new businesses, expansions, and research. For their stock to go up that much, it means the market is expecting one or both of the following
1) Profits - which is tied to the volume of loans and investments these companies make. If more money is going out the door....it's gotta be going somewhere. Jobs!
2) Cash Flows - which is tied to the collection of principal and interest on those loans and investments. In other words, people paying their bills. If people are paying their bills....then business is good.