Reason behind the inflation in stock market?

Question

Reason behind the inflation in stock market?

Answer 1

there is no inflation in stock market, in fact the stock prices have come down drastically and it looks like the shares are available on 50 % or more discount, it is more like a discount /clearence sale rather than inflation

Answer 2

The short and the long answer to your question is the devaluation of the US dollar.  Inflation in general erodes the value of the US dollar.  In this case the source of inflation is, in part, from the rate lowering actions by the Federal Reserve Board.  By lowering the Federal Funds Rate and/or Fed Discount Rate in an effort to stimulate the broader economy by making cheaper money available to businesses the yield on bonds is lowered.  Correspondingly the interest rates charged for home and other loans increase in order to provide a greater yield/profit for bond holders, both domestic and foreign.  Investors, in turn take their money out of the US Bond market and move it to other investments yielding higher interest rates and/or yields.  In this case the ECB (European Central Bank) has a discount rate around 4.25% while the US Fed Discount Rate is at 2%.  This makes foreign investment more attractive.  So investors, both domestic and foreign, pull money out of US Bonds and invest in foreign bonds.  To further complicate the matter the EURO then becomes a more attractive investment than the US Dollar and the value of the US Dollar further erodes.  Further pressure comes from "oil".  Oil in traded in US Dollars; so as the cost of oil increases the value of the dollar decreases which now results in the US consumer paying more at the pump.  Hence inflation.

Answer 3

this is done by the politions who only r aware and worried for their vote banks the prices of fules is riseing is true but then also the kerosene is sold to the rikshaw drivers .if the local leaders do this then they have to lose votes of the rikshaw drivers .the main concentration is of the votes .this is a very major problem of india and if nt tackled india will undergo financial difficulties in future which will help his enemies (eg pak america )

Answer 4

interest rates are too low and so they are giving stocks a higher earnings multiple.  when interest rates increase it will put pressure on stocks and they will fall greatly due to a double whammy.  lower earnings multiple and higher expenses eroding profits.

Answer 5

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Answer 6

I beleive you mean why the stock market is down and inflation is up as inflation in stock market would mean it is going up but currently the opposite is true.

Main reason for inflation and down trend in stock market is because of crude oil price going up as the demand for the same is increasing where as the supply is constant.

Answer 7

Inflation is not in the stock market, Rather inflation is seen in the country's economy.

This high rise of inflation has caused concerns in the stock markets, which have led to the recent crashes in the market indices.