🟨 SP500 based on YoY GDP Change

12 мар. 2023 г.

Volatility in many times in the market is bad and the stock market is a mirror of the economy.

When you go back prior to the Great Bull Market (1980s), you wll see that there were very wide swings in real GDP. These are the Boom and Bust cycle.

Now, as the FED evolved its policies it learned how to contain the market and flatten the Boom and Bust cycle and flatten the economy. And you can see that when we have the low volatility in GDP, the market has been very much accustomed to this.

However post 2020 we are more volatile then ever. This is exactly why the FED is stepping hard on the breaks until they for sure put a cap on the upside and on the inflationary side.

It is again interesting to see that Volatility is just bad for the market.