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Non-Tech : Airline Discussion Board

JETS 25.18

-2.0%

Nov 13 4:00 PM EST

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From: handyman

8/5/2020 4:54:30 PM

1 Recommendation

Recommended By
OldAIMGuy

of 1868

From: handyman These. stats show that fiscal and monetary stimulus with more to come with a t for trillion are making people whole. Also look at the savings rate and don’t forget the gains in the market. Anecdotally the motels and hotels everywhere here have no vacancy signs so $200 plus a night rooms are not wanting for travelers. And everyone got 1200 in free money with another 1200 on the way.	8/1/2020 8:35:28 AM
	3 Recommendations of 209350

I came across some mind bending stats in today’s Up and Down Wall Street in Barrons. I believe this is somewhat off the topic of Apple but indirectly related to why the market can absorb such a high multiple for the stock so here goes. From Joseph Carson, the former chief economist for AllianceBerstein. “ The federal reserve and federal gov’t pumped about 5 trillion into the US economy in the three months ended in June which compared to nominal GDP of 4.85 trillion measured on a quarterly rather than annual, basis. “ Never before has the scale of fiscal and monetary stimulus matched the nation”s nominal output in a single quarter.” More from the piece. As the nations’s output suffered a recorded decline some 500 billion the market cap of domestic companies increased by 7 trillion.Stock market cap hit two times nominal GDP eclipsing the record of 1.87 times at the peak of the dot.com bubble in 2000’s first quarter. In other words 2020 equity market is the most expensive in our lifetime quoted by Carson. More mind boggling stats from David Rosenberg of Rosenberg Assoc. “ While wages and salaries plunged at a 680 billion annual rate personal income soared by 1.386 trillion in the quarter owing to 2.419 trillion in transfer payments. But the 32.6% increase in personal income was met with a 34.6% rate of decline of spending,as households boosted their savings rate to a record 25.7% from 9.5% in the first quarter. Looks to me like another big stimulus is coming and when we get a vaccine people are going to have a LOT of discretionary income to buy new Apple iPhones. It is certainly upside down thinking but it appears to me given apple’s surprise quarter the rise in market cap is justified and can go even higher. The gov’t has stepped in like never in history and has not only made most people whole but has given them rocket fuel for a huge comeback when we put this virus behind us.

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