If the markets react that means it is probably significant news, since the people who have millions at stake think this is enough to increase the future outlook of the top companies. You should take them seriously because the markets reflect the thoughts of hundreds of thousands of people who's salary depends on trying to find out what the future looks like. Not sure what would be a better indicator of whether news is significant or not.

Now of course what is good for top companies may not be good for individuals, so you can't just say that a stock price increase means people's lives are going to be better. But I think you can say that a stock market increase means the news you are seeing is more likely to be important.

But there are also people with millions at stake who are metagaming that other people will think this is important enough to increase the future outlook of top companies and thus changing their strategies to profit off them.

The market is a weighted function of an insane number of variables, and we know none of the weights. Any attempt at reading the market to understand those variables is going to be about as useful as trying to observe butterflies by looking at hurricanes.

The meta-strategies help market prices be accurate, faster, by beginning to move prices towards the “right” number in advance of information that would do the same thing. In the long run they don’t misinform.

This obviously excludes strategies based on fraud, misinforming the public, etc.

Accurate or right here means economically efficient, not correct according to the prediction of some simplified model. Such strategies very much obfuscate any attempt to find and measure causal links between particular events and stock price movements.

I could say the markets are up due to the vaccine news, or because the US election was called and people are seeking stability, or because the US election was called and the market prefers biden, or because investors are pricing in a Trump 2024 run, or because people just expected it to go up after any of those things, or because a collection of automated trading bots saw some arcane pattern in the data which has no real-world relevancy but they nevertheless have been trained to buy. None of those predictions are falsifiable.

Correct; the prices are based on the sum of all information, which is a list we do not have. And “the market” is of course a basket of individual prices, which are not measured the same by everyone.

Just because you don't find layoffs as ideologically palpable as shedding (some or all) the inefficiency incurred by covid doesn't make the markets wrong.

There's potential for a huge gain in efficiency here. The stock market is fundamentally a long bet (if you want to short the entire market you invest in things outside it). Of course the market is exited at the long term prospects of that.

Also, you're being a little disingenuous when yo say "These are the same markets that cheer when job cuts and redundancies are announced." When one under-performing company cuts jobs it tends to go up because costs are decreased. When a well performing company announces a mass layoff it tends to be a toss up because signals are mixed. When a ton of companies announce layoffs the market tanks because the signal being sent is things are getting worse all around. You're comparing a positive reaction to a single entity event (company announces layoffs) to a positive reaction for a market wide event (potential for covid to become less of a burden on the economy as a whole). You can't cross compare as if they're 1:1 like that.

> There's potential for a huge gain in efficiency here ... Of course the market is exited at the long term prospects of that.

IMHO this supports the OPs point, which is that the stock market in its current incarnation does not care about the lives of human beings.

Which is unacceptable. We collectively have enough creativity and intelligence figure out how to have a stock which can not only reflect corporate profit but also human well-being.

I think it begins by acknowledging market externalities - pollution being one of them - which allow for activities which are profitable within the shared fiction of the market, but which are, in our broader shared reality, ultimately destructive.

The Happinese/Well-being GDP also seems like an interesting idea.

I don't think the stock market should care about lives of human beings directly. It's not meant to do that.

I do agree that using the stock market as an indicator of quality of life, general well being of human beings or anything else than the financial viability of publicly traded companies is not a very good idea. That's a frequent mistake made by financial journalists and politicians alike, however, especially during election season.

For what its worth, capitalism does not care about the lives of human beings.

A lot of people are invested in the stock market, not just rich people. Essentially anyone with a professional-class job has a retirement fund invested in stocks, at least in the US.

The top 1% own over 50% of equity in the country. The following 9% own about 30% of equity. All in all, that's the top 10% owning more than 80% of the equity in the country.

I disagree that a lot of people are invested in the stock market. Statistically, it's very few people.

Just because the top owners skew the share of ownership so much doesn't mean that "very few people" are invested.

Our pensions might be nothing to the top earners of the country but that doesn't mean they're nothing to each one of us individually.

A similar distribution holds for income, but I don’t think it would be wrong to say that a lot of people have an income in the US.

It means that people who research this think that the news is correct. And unlike pundits, these people have skin in the game and win or lose based on the correctness of their assumptions. If the market were down today, it would be an indication that the news is hyping something that's doubtful.

It's a good indicator of what the world (well, people with capital) believe in. A very positive general market reaction might indicate that the news is correct. (Might.)

If only it's that accurate... IMO market participants just react to news because they expect others to act a particular way, and I as a participant would try to see how I could profit from how others act.

In this case, no one probably bothers to dig deeper, it's the BBC and it's good enough, everyone will think the world will soon be rid of Covid, so they will buy stocks, so I should also join the up wave...

The beauty of it is, you don't have to. The subtle truth is that, as a practical matter, you often have to care about "opinions" you don't respect or admire. Another's opinion is a fact, albeit a minor one, from your point of view. What's more, it's the legitimate output of a computation they performed based on a set of (weighted) inputs. The market is best seen as a machine that measures two things: which market is better (meta market), and within each market, which product is better, from the sole perspective of making money.

All things die, including businesses. Layoffs can be a good thing if the job is terrible, the business is a zombie. Can you imagine working at Sears? It's good to let bad businesses die because the alternative is worse. That said, humans like to get settled, comfortable, get a rhythm to life, and changing jobs (because of a business failure or whatever) is a HUGE stressor. And its uncertain if you don't know where you can "plug in" to the economy and get a job, so you're in a rush, and new employers rush you through onboarding and acquire all kinds of legal leverage over you, and so on.... And the American worker is not trained to examine their options from any perspective other than "Job Title" and "Salary". Even "Benefits" often get short shrift.

Anyway, long ramble short, you don't have to admire the minds that move money, but you should take them seriously. It's worth considering, though: what would it take to have your cake and eat it too? How would you make the "markets" more admirable, which in your case seems to mean "more moral"?

Why shouldn't companies lay off people they no longer need? You hire N people, you lay off X% of the least performing ones, you end up with a stronger company, and you can hire again.

Is your position to never lay off anyone ever?

You should take the markets seriously if you want to make a lot of money. That’s why rich people are rich.

I would add some clarifying quantifiers to your statement as not all rich people are rich because of markets knowledge. Inheritance of wealth is also an important contributor.

The greatest predictor of wealth is your family background, not your knowledge/interest of the stock market:

https://www.theatlantic.com/business/archive/2014/01/economi...

most rich people are rich because they were never not rich

That and not caring who is hurt along the way and from whom their hoarded wealth was exploited.

There are several sustainable investing funds if you want to focus on that.

because number go up

seriously tho, hackernews demographic is upper middle class white men. The ones who benefit most from capitalism.

I don’t know if you’re aware but HN is a site run by venture capitalists and is mostly used by developers making north of $200k in silicon valley.

There actually used to be a lot more posts about the stock market than there are now. So I guess there’s a little more diversity now.

The stock market is "a graph of rich people feelings" (attributed to someone on TikTok)

> It's just a bunch of rich people in the end.

The election is over. You can stop peddling bs.

Thus far in 2020, Gallup finds 55% of Americans reporting that they own stock, based on polls conducted in March and April. This is identical to the average 55% recorded in 2019 and similar to the average of 54% Gallup has measured since 2010.

It is probably much higher as well. Many people probably do not know that their retirement plans are invested in the stock market

55% of Americans may report that they own stock, but the top 10% own 88% of all stocks

https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

what's your point? owning .0001% of something is still owning something

What kind of an argument is that? Just because somebody owns more stocks than you do doesn't make their price development less relevant to you.

Because an effective vaccine would be really good for the economy so a positive market reaction indicates that people researching this stuff think the likelihood of an effective vaccine being ready in the near future is higher. So it's not cheering the market reaction, it's cheering the potential for an effective vaccine and the market reaction is just a signal that the vaccine is legit.

stocks and politics are fair game for everyone. like opinions