Booms are inevitably followed by busts. The hard part evaluate when you’re int he middle of either is “how far does it go”.
Myself, I separate phrases such as “the general economy” from “stock prices, stock index prices” because they can detach, widely. Nobody can really define what they mean by “general economy” anyway. Interest rates? Corporate profits? Employment? Productivity? Over the past say 5 years, I would say that cop profits have done quite well and that has shown up in the market averages. But many, if not most people, would not say their individual “economies” are exactly booming. Many are eating dirt.
In this zero interest rate environment we have had for several years, a zillion schemes and scams are concocted to produce yield; meaning add’l yield over Tsys. Some, many of those collapse after either rates rise or the leverage comes out of the underlying.
I am no better at predicting the future then anyone else, but these things are normal and happen with reasonable regularity. Thousands of laid-off oil workers over here, millions of consumers spending the $10/week they are saving on gas on crap over there.
Opinion department: I *do* think the leverage coming out of oil lending could definitely be an issue that is not over and will not be over for a fair while. I also think it remains early to nibble on oil stocks. At a minimum, I think it would be wise to wait until the end of the year. Because stocks that have underperformed often get tossed out, indiscriminately, at this time of year. USUALLY it happens move Oct-Novemberish, but this oil thing has really acquired legs in this last couple of weeks.
Sure we can.
Economy is jobs --almost all jobs are for corporations --mostly by publicly traded corporations. Right now there's about $20T in stocks and that's what's hired about 125 million employees --that's a $160,000 portfolio hiring each new worker.
When stocks go up just one percent it means over a million people get hired. OK so it can take a half a year but that's why stocks are a leading indicator and jobs is a lagging indicator. They're still good indicators though.