It is only a matter of time until reality reaches the stock markets. When could that be?
There is currently a large disconnect between the stock market in the United States and the country's economy, especially in the tech sector. So why is this the case?
According to Mati Greenspan, the Founder of Quantum Economics, there's always some level of disconnect between what's happening in the stock market and what's happening in the economy.
"This is basically due to the creation of money and how money flows. But right now at this moment in time, that disconnect is basically wider than ever," Greenspan explained during his session at the TradeON Summit titled What's Around the Corner for FX: US Elections, COVID-19 and More.
"The economy has been tanking, we saw these forced lockdowns across the world due to the coronavirus, and even though there was an initial crash in the stock markets, we've already completely recovered and is once again zooming towards the sky."
US Federal Reserve is keeping the stock market afloat
According to Greenspan, this disconnect has been driven by two main causes - the US Federal Reserve and the coronavirus pandemic attracting first time traders to the stock market.
"The main reason for this is because of the central banks, which is the Federal Reserve in the United States, their initial response to COVID-19 was large injections of cash, so copious amounts they poured into the economy - we're talking about trillions of dollars, multi-trillions, in just about every major economy."
"That money generally goes directly to the markets. I mean that kind of money, when it's created by central banks, it goes to the stocks, it goes to bonds, it goes wherever investors feel they can use the cash."
Wave of new traders Leads to interesting movements
The second reason, as pointed out by Greenspan, is due to the influx of new traders to the markets. As Finance Magnates has reported, the COVID-19 pandemic has brought a new wave of traders into the markets, driven by heightened Volatility.
This, coupled with the fact that a lot of people have more time on their hands due to working from home and lockdown restrictions, in addition to a lot of traditional gambling avenues being closed - such as sports betting and pokies, people have been looking to the stock market to get their fix.
Greenspan goes onto to explain how the accessibility of the internet, the gamification of the industry, and extra stimulus into economies have all led to an uptick in the number of people becoming traders.
However, as Greenspan notes, this has led to interesting market moves - whether it's Tesla's stocks being overvalued, or after Hertz announcing it was bankrupt, the company's stock took off and zoomed upwards because newbie traders came in and flooded the firm's stock.
Reality will catch up with the markets sooner or later
With the stock market acting irrationally despite the worsening situation in the United States amid COVID-19, how long will it be until we see some kind of correction? According to Greenspan, it's hard to tell when the correction will happen, but sooner or later, reality will catch up.
"I believe at some point, the markets are going to have to face reality, or reality is going to catch up to the markets. You can't have it both ways. But, of course, markets can remain irrational for longer than you can stay solvent."
"... You can never really know what's going to happen in the short-term… what's going to happen a week from now is anybody's guess. Some news can come out that totally shakes things up, COVID-19, for example, was the biggest case of that, but even since then we have all types of announcements and news events that can really change the dynamic and change the flow of things in the market. It's very difficult to foresee things like that, we're just going to have to keep our fingers on the pulse."
There is currently a large disconnect between the stock market in the United States and the country's economy, especially in the tech sector. So why is this the case?
According to Mati Greenspan, the Founder of Quantum Economics, there's always some level of disconnect between what's happening in the stock market and what's happening in the economy.
"This is basically due to the creation of money and how money flows. But right now at this moment in time, that disconnect is basically wider than ever," Greenspan explained during his session at the TradeON Summit titled What's Around the Corner for FX: US Elections, COVID-19 and More.
"The economy has been tanking, we saw these forced lockdowns across the world due to the coronavirus, and even though there was an initial crash in the stock markets, we've already completely recovered and is once again zooming towards the sky."
US Federal Reserve is keeping the stock market afloat
According to Greenspan, this disconnect has been driven by two main causes - the US Federal Reserve and the coronavirus pandemic attracting first time traders to the stock market.
"The main reason for this is because of the central banks, which is the Federal Reserve in the United States, their initial response to COVID-19 was large injections of cash, so copious amounts they poured into the economy - we're talking about trillions of dollars, multi-trillions, in just about every major economy."
"That money generally goes directly to the markets. I mean that kind of money, when it's created by central banks, it goes to the stocks, it goes to bonds, it goes wherever investors feel they can use the cash."
Wave of new traders Leads to interesting movements
The second reason, as pointed out by Greenspan, is due to the influx of new traders to the markets. As Finance Magnates has reported, the COVID-19 pandemic has brought a new wave of traders into the markets, driven by heightened Volatility.
This, coupled with the fact that a lot of people have more time on their hands due to working from home and lockdown restrictions, in addition to a lot of traditional gambling avenues being closed - such as sports betting and pokies, people have been looking to the stock market to get their fix.
Greenspan goes onto to explain how the accessibility of the internet, the gamification of the industry, and extra stimulus into economies have all led to an uptick in the number of people becoming traders.
However, as Greenspan notes, this has led to interesting market moves - whether it's Tesla's stocks being overvalued, or after Hertz announcing it was bankrupt, the company's stock took off and zoomed upwards because newbie traders came in and flooded the firm's stock.
Reality will catch up with the markets sooner or later
With the stock market acting irrationally despite the worsening situation in the United States amid COVID-19, how long will it be until we see some kind of correction? According to Greenspan, it's hard to tell when the correction will happen, but sooner or later, reality will catch up.
"I believe at some point, the markets are going to have to face reality, or reality is going to catch up to the markets. You can't have it both ways. But, of course, markets can remain irrational for longer than you can stay solvent."
"... You can never really know what's going to happen in the short-term… what's going to happen a week from now is anybody's guess. Some news can come out that totally shakes things up, COVID-19, for example, was the biggest case of that, but even since then we have all types of announcements and news events that can really change the dynamic and change the flow of things in the market. It's very difficult to foresee things like that, we're just going to have to keep our fingers on the pulse."
Gender Gap in Online Privacy Concerns: Women More Reserved in Sharing Personal Data
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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