It has been a while since the market has had a major correction, and with the “Trump Bump” it seems like a recession is nowhere in sight. Though isn’t that what everyone thought in 2006.
The economy has been growing, because of the confidence President Trump gave investors. Confidence is one of the key factors in a growing economy. If the confidence was taken away, then what would run the economy. The stock market is breaking records and so is personal debt. Credit cards and student loans are the largest factors in the nation’s personal debt. When the time comes for someone to pay, then what? The stock prices have been so inflated by the confidence that the realistic prices have gotten lost in the excitement. This looks similar to the excitement before 2008. There was a lot of buying and a lot of debt. Another thing to point out is that the unemployment rate is falling. Sounds good right? It is not as it seems, whenever the unemployment rate gets close to zero a recession usually follows. Certain economists are also saying that we are in a bubble and a correction is coming.
The inflated stock prices, debt, and unemployment rate makes it seem like we are in a bubble. The record-breaking stock performance feels a lot like pre-2008. It looks like the storm is coming, but when?