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Why are markets strong now?

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  • 19-03-2021 9:23am
    #1
    lalababa
    Registered Users Posts: 1,726 ✭✭✭


    Why is the ISEQ 700 odd points up from pre-covid after a massive fall?
    Why has GDP increased during an almost year long lockdown of the economy?
    Lest I forget BREXIT.
    House price increases?
    Massive increase in rental availability, yet no major rent decreases.
    WTF is going on?
    Is it a head in the sand moment?
    Is it something else?
    Does the market think people are saving to eventually blow their load?
    Are the fundamentals still sound?
    Is it just a feeling?


Comments

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    #2
    daheff
    Registered Users Posts: 5,842 ✭✭✭daheff


    Confidence.

    Markets are up because investors have confidence that companies & economies will recover.


  • Options
    #3
    Maximus277
    Registered Users Posts: 42 ✭Maximus277


    Money printing and really low interest rates is the cause.

    Governments are printing trillions and dolling it out to people and they are using the cash to buy stocks and to put a deposit down on real estate.

    And when you get zero interest on your savings in a bank, property and stocks look attractive to people hoping to get a return on their savings, which increases the demand and pushes up the prices of these risk assets.


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    #4
    Shedite27
    Registered Users Posts: 9,370 ✭✭✭Shedite27


    lalababa wrote: »
    Why is the ISEQ 700 odd points up from pre-covid after a massive fall?
    Why has GDP increased during an almost year long lockdown of the economy?
    Lest I forget BREXIT.
    House price increases?
    Massive increase in rental availability, yet no major rent decreases.
    WTF is going on?
    Is it a head in the sand moment?
    Is it something else?
    Does the market think people are saving to eventually blow their load?
    Are the fundamentals still sound?
    Is it just a feeling?
    In addition to the previous responses, there's socio-economic answers to all your questions.

    Markets are forward looking, most people are planning on going on holidays and eating/drinking out like there's no tomorrow when we get out of lockdown. That's good for most stocks on the ISEQ (Ryanair, Hotels etc). ISEQ is fairly small anyway, and only about 4/5 industry makes up most of it.

    GDP is always an odd one in Ireland, heavily influencend by the Americans using it for tax breaks.

    House Prices.... the generation that are looking to buy/trade up haven't lost jobs this year, most have saved substantially more. Leads to bidding wars between people with bigger budgets. also less builds finishing so less supply.

    Rent prices.... ask yourself what you'd do if you were a landlord in Grand Canal, drop your rent to fill the place now, knowing you can't raise because of rent controls? Or leave the price high and place empty, knowing you'll fill it again at the hiher price in September? It's lower price for 2021 V higher price for next 10 years.


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    #5
    Mad_maxx
    Registered Users Posts: 13,505 ✭✭✭✭Mad_maxx


    lalababa wrote: »
    Why is the ISEQ 700 odd points up from pre-covid after a massive fall?
    Why has GDP increased during an almost year long lockdown of the economy?
    Lest I forget BREXIT.
    House price increases?
    Massive increase in rental availability, yet no major rent decreases.
    WTF is going on?
    Is it a head in the sand moment?
    Is it something else?
    Does the market think people are saving to eventually blow their load?
    Are the fundamentals still sound?
    Is it just a feeling?

    world flooded with liquidity
    realisation by the smart money that Covid is not the black death
    money needs a home , fixed income paying near nothing and deposits charging savers money

    risk appetite has to go up


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