The stock market has no conscious, no awareness of the past, present or future. It is a nonthinking entity that predicts nothing. It is not a forward thinking indicator.
It goes up or down based on one thing alone. If more money flows into the market than out, the stock market will go up. If more money is pulled out of the market than what goes in, it will go down. Likewise, if more people buy a stock than sell, the stock will go up. If more people sell the stock than buy, it will go down down.
Big institutions can move markets and stock prices by their buys and sells. In general, if there is not a recession, the market tends to go up. If there is a recession with high unemployment, the market may go down because there are less people buying into it.
Why the big Trump rally right now? Because Trump will be a great president that will make the economy strong? No one knows yet what a Trump presidency will be. The market does not know. It only responds to the huge influx of money that is driving prices higher.
People attribute to the stock market things it is not. Maybe this rally is irrational exuberance. Money pouring in that can just as easily pour out. Even Obama thinks a high stock market is a reflection of a strong economy. It is easy to ignore sluggish growth, depressed wages, the continued loss of the middle class, and think a high stock market is some kind of financial accomplishment.
Governments around the world have done everything they can to punish savers and force people into the stock market. We are in the same boat now. Our underfunded pension funds, our retirements, pretty much everything. So much depends on a rising stock market that it is downright dangerous.
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