Stock prices and economic performance are linked. Try the capital infusion is one time but the stock price is dependent upon the value of future cash flows. the chart was showing that changes in hiring behavior and stock prices were related (looks like stock prices led by 6-9 months). My company slashed workers when our volumes were falling. Not so coincidentally the stock price was also falling as were our earnings due to market factors. Now that our end markets have been recovering over the last 18 months out stock price has more than tripled and our hiring has increased because we have volume.
Stock prices reflect a company’s prospects during normal times, when basic economics are at work.
What do you suppose happened to stock prices during the Weimar Republic’s QE folly? They went up exponentially.
Right now the Fed is creating $85 billion a month to inflate stock prices. Thus, stock prices are tied more to dollar speculation than any particular company’s prospects. There are a limited number of assets that you can convert, soon to be worthless, dollars into. Stocks are one of those assets.