Stock Investors Bet on Growth

If the apocalypse is nigh, why haven't the equity markets collapsed?


JPMorgan economist Jim Glassman thinks the stock market is betting on a return to the global boom:

So why, in the presence of an unprecedented financial shock and rampant worries about recession, is the stock market weathering the storm so well? Yes, it's down. But please, down only 13½% from last fall's record high, and setting an all time record amid the financial storm?.... Yes, the economy is growing too slowly—it has been for more than a year, based on labor market trends—but it's not imploding. Some sectors are down but many are up. Some regions are paying for self-inflicted real estate excesses and some are not. The national economy didn't overheat and the Fed didn't have to slam on the brakes, two common precursors to recession. At the same time, the global economy is enjoying its best economic performance since the time of the dinosaurs, thanks to the forces that have contributed to the US trade deficit. Why else would equity investors hold high ground amid a once-a-century financial crisis and recession worries?