Career News 24/7: This Chart Of The Economy And Stocks Makes Almost No Sense

Monday, August 5, 2013

This Chart Of The Economy And Stocks Makes Almost No Sense

CHART OF THE DAY: July Has Been The Great Rotation On Steroids For Stock Market Funds

View this email online | Add newsletter@businessinsider.com to your address book

Monday, Aug 5, 2013

This Chart Of The Economy And Stocks Makes Almost No Sense

The S&P 500 closed at an all-time high on Friday.

Meanwhile, estimates for U.S. GDP growth in 2013 have been falling for two and a half years.

Bloomberg Chief Economist Michael McDonough tweeted a chart tracking the two measures since February 2011.

It's quite the head-scratcher.

To be clear, the U.S. stock market and U.S. economy aren't exposed to the same things. Perhaps the biggest difference is that U.S. stocks, as measured by the S&P 500, generate roughly half of their business abroad.

Also, stocks move based on expectations for growth and certainty about those expectations. Sure, the near-term growth expectations have come down. But uncertainty, as measured by the policy uncertainty index or the CBOE volatility index, are near their post-crisis lows.

Regardless, the U.S. economy is the biggest source of business for the S&P 500 companies. So, it's okay to be confused and perhaps frustrated by this chart.

Read »

	Also On Markets Today:
	TECH STOCKS FALL: Here's What You Need To Know Michigan Judge Says Detroit Bankruptcy Is Unconstitutional, Demands Filing Be Withdrawn