The Stock Market Depends on Consumer Spending, Not Just Tech

Yesterday the Wall Street Journal said the stock market would be sucking if not for the tech sector:

Three technology titans have powered nearly half of the S&P 500’s advance this year, a worrying sign for investors expecting a strengthening economy to lift shares of manufacturers, oil companies and other firms whose fortunes typically improve with growth.

The S&P 500 technology sector has driven more than three quarters of the index’s gains, according to S&P Dow Jones Indices. The next biggest contributor is the consumer-discretionary sector—which includes tech-focused Amazon and Netflix—with more than a third of the advance.

If you look at a few weeks of performance, you’ll always find something to worry about. Here’s what a few S&P sectors look like for the past six months:

Tech is doing great, but so are financials and the consumer discretionary sector—which does include Amazon, but is overwhelmingly standard consumer stuff like Disney and Comcast and McDonalds. And consumer durables have been kicking ass for the entire past year.

I don’t know how long this will keep up, but the market isn’t about to crater as soon as tech stocks come back down to earth. It’s going to crater if the Fed doesn’t allow middle-class earnings to rise and consumers stop spending. This is one sense in which the stock market really is a proxy for the entire economy.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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