The stock market is a barometer of the economy, which is not a simple expression. Sometimes, the stock market deviates from the economy. Contrary to the stock market, the economy is not just a unique phenomenon in China or the past few years. It is everywhere in the history of global stock markets, and there is no difference between developed countries and emerging markets. Rational economy and emotional stock market seem to be an eternal theme in financial life, and they "will be combined for a long time, and will be separated for a long time". The inherent structure and trading characteristics of the stock market itself have predestined the objectivity and inevitability of this strange phenomenon. This was the case in the past, today and in the future.

is China's stock market moving towards marginalization? This is the focus issue that people pay special attention to and dispute endlessly at present. One of the arguments is the separation and deviation between China's economic growth and stock market performance. It is true that the stock market is a barometer of the economy, which is a simple cognition and popular saying that has existed in the investment community for a long time. But in real life, can the ups and downs of the stock market really faithfully and accurately reflect the ups and downs of the economy? This is not only a big puzzle and myth for investors, but also has profound practical significance for the discussion of whether China's stock market is marginalized at present. This paper will scan the international market based on China's stock market, and make a brief analysis and discussion on this.

The lagging and distorted barometer of China's stock market

Since its inception, China's stock market has been both vigorous and muddled, both vigorous and boundless. So does the pace of China's stock market reflect the magical charm of its rapid economic growth? The answer is not covered by a simple word "yes" or "no".

First of all, China's economy is always in a high-speed and stable growth, but the stock market shows almost regular wavy movement, although its amplitude is far less intense and its frequency is much less significant than that of Hong Kong stock market. Secondly, the cyclical wave of the stock market is higher and higher, which shows the regular changes of prosperity and decline, and also confirms the overall upward trend of the stock market. Finally, the rise of the stock market has never reached the level of economic growth, although it was once very close. In other words, the lag of China's stock market does not really reflect the proud achievements of the national economy, at least in the past few years.

American stock market has evolved from a barometer to a lone ranger

So is the phenomenon of "deviation from stocks" unique to China? We can look at the American market with the same eyes, which has a stock market culture of more than 211 years. In the past few years, the American stock market has obviously drifted away from the economic trend. Although the economy still shows a moderate growth rate of 7.7%. In contrast, the US stock market has suffered a crushing defeat in the same period. Instead of enjoying the happiness brought by economic growth, investors are trapped in the quagmire of the stock market and unable to extricate themselves, which can be described as "bad weather" and "anxiety for the country and the people". Investors who have been infatuated with the stock market for many years have to say goodbye with tears.

Looking at the American market since 1991, the stock market has experienced ups and downs. Shareholders are full of joy and sorrow, and they are fully aware. Described in the fashionable language of Wall Street, it is the "irrational collapse" following "irrational prosperity". In the enlightenment of securities investment, investors have experienced a spiritual purgatory and a baptism of soul. The vigorous and ups and downs of the past ten years seem to be just a chic walk in a dream.

Therefore, the phenomenon of "deviation from stocks" can also be confirmed in the United States. Although the stock market did once play the role of an economic barometer for more than 61 years, it was more often alone and went its own way.

A barometer of the Asia-Pacific region

If some people think that the US stock market is too distant and huge to be properly comparable, it may be more enlightening to explore some developed markets around us.

once upon a time, Japan's stock market showed its majestic momentum and deadly temptation, and it soared more than three times in seven years. However, in the midst of people's singing, the stock market collapsed. For more than a decade, thousands of investors have only broken hearts and lost dreams. What the stock market left them seemed to be only the sadness and tragedy of "forbearing to see history with tears".

Similar to the situation in America in the early years, Hong Kong's economy and stock market went hand in hand in the 1971s. With the superb economic growth in the 1981 s, the stock market has also flushed, but it has always fallen behind the pace of economic progress. In the 1991s, the stock market experienced three ups and downs around economic growth. Burst out again and again, bringing investors a period of passionate years, but returning to silence again and again, leaving investors with beautiful misunderstandings and pieces of incomplete memories. Therefore, as far as the Hong Kong calendar is concerned, it seems that the statement that the stock market is an economic barometer is not unreasonable but far-fetched.

the flurry of the past few years has made the global stock market prosperous. After understanding the true meaning of financial investment, many people began to doubt that the stock market is an economic barometer. Yes, why does the stock market movement often run counter to economic growth? If it is not, how to explain the capital market theory and common sense of financial investment? This "specious" or "specious" proposition makes many Chinese and even global investors deeply confused and confused. The barometer relationship between the stock market and the economy is so hazy and illusory!

Five sources of "deviation from stock market"

In the long run, economic development is the basis for the survival and growth of the stock market. Without the support of the national economy and corporate profits, although the stock market can be brave for a while, it is difficult to promote the prestige of the world. However, in this case, why does the stock market deviate again and again, and there is a strange phenomenon of "deviation from stocks" frequently? The main reasons are the following five points.

first, a rational and controllable economy and an emotional and impulsive stock market.

economic growth is rational, controllable and predictable to a certain extent. First of all, the government's fiscal policy and monetary policy usually effectively stimulate and restrain economic growth, so that it has rules to follow. Secondly, the national economy is not easily disturbed by human factors, and it is difficult for any individual or group of investors to directly manipulate the pace and rhythm of economic growth. In addition, there are few violent fluctuations and shocks in economic growth. The growth curve of the economy is much more gentle and balanced than the trajectory of the stock market, and there are never those thrilling moments.

But the stock market shows more sensibility and impulsiveness. First, the stock market movement is the result of the participation of many investors, which is driven by the invisible hand of the market, and it is difficult for the government to effectively intervene. Second, the stock market is affected by many factors, ranging from political and economic situation to interest rate level, from company marketing to market rumors, from forecast value adjustment to analyst rating. Moreover, many variables cannot be quantified, such as investment psychology and market behavior. This makes the market operation both scientific and artistic, and the same factor will bring different effects and even opposite consequences in different environments. Third, the stock market may suddenly fluctuate violently, and its fluctuation curve is not as pleasing as the economic operation. When the investing public goes astray, the magnificent mass movement will clean up the normal stock market ecology and make the market bubble brew in it. Fourth, economic data comes out once a month, but the stock market trading may have to race against time, which has implanted deep genes for the instantaneous changes of the stock market, making it difficult for anyone to tell the trend of the stock market, especially its recent trends.

when the stock market is immersed in passion and excitement, its inertia and impulse are irresistible. After losing its restraint and resistance, the stock market will rush to the extreme edge in investors' delusions, which will make the stock market more prone to bubbles than the economy. The global stock market is the same. What is lacking in the market is not a sober and calm brain, but courage and courage. No matter when and where, the bad singers are in the minority, and they will feel struggling and exhausted. Its "nonsense" will make the company's income plummet because of the calm trading, and it will also make the wealth in the hands of thousands of investors plummet. It's like a modern version of "the emperor's new clothes". Dare to stand up as the spokesman of the bear market, need amazing courage and psychological quality, not afraid of causing public outrage, not hesitate to become a public enemy, and ready to bear great mental pressure at any time. Although "the truth is often in the hands of a few people", the future of the stock market has always depended on the collective behavior of the majority. This determines that the emotional and turbulent stock market is bound to shake up and down with the rational and controllable economy as the central axis.

secondly, corporate profits are the link between the economy and the stock market.

The stock market reflects economic growth indirectly rather than directly. The required media is the sales profit and financial status of listed companies. In other words, the stock market indirectly describes the operation of the national economy through the level of corporate profits. However, economic cycle, business cycle, industry cycle and even the company's life cycle do not always overlap, and the intersection between them will lead to a short-term deviation between the company's profitability and economic growth. When this link between the stock market and the economy is broken, the stock market movement will part ways with economic growth.

if economic growth is dominated by market consumption, then the performance of the stock market depends on the profitability of listed companies. The excessive expansion of many enterprises in the past has enabled them to earn profits several years in advance, exceeding the future market demand. Therefore, although the economy is still growing moderately at present, the overstock and excess production capacity have dried up the profit sources of these companies, and it will not take a year or so to digest the excess production capacity. Therefore, when market consumption and commercial investment go their own way, the national economy dominated by market consumption can still maintain growth, but the stock market, which depends on corporate profits and commercial investment, will be hit hard, leading to the breakup of the economy and the stock market and mutual treasure.

the securities market is only a part of the whole national economic system, and it can't be independent beyond the company's profit. If the operating and financial conditions of listed companies are not good, although factors such as policy orientation, speculation atmosphere and speculative mentality may stimulate the stock market to jump up and down in the short term, it is impossible to expect the stock market to have a long-term glory and an extraordinary future. The stock market is not a cornucopia, it is not only a means of corporate financing, but also a channel of wealth distribution. Investors get the status of shareholders by paying fees, just to share the company's profit income in the future. If the company is unprofitable and hopeless, it will lose the trust and care of its shareholders. If this atypical plague spreads from individual companies, it may cause heavy losses to the whole industry and even the whole stock market. This is not the fault of the stock market itself, the fault of the supervision system, the fault of the operation mechanism, and the fault of thousands of investors. The focus lies in the foundation on which the stock market depends.

If you have a keen eye to penetrate the stock market, you will see that the company's profit is the invisible hand behind the stock market, which silently controls the ups and downs of the stock market, the ups and downs of honor and disgrace. Without the necessary supply of the company's profit growth, the stock market will face the danger of air drying and brittle folding. Just as a healthy body is not maintained by antibiotics every day, a healthy stock market cannot rely solely on the short-term effects of fiscal and monetary policies.

thirdly, the current economic situation and the expected company prospects.

The economic situation is mostly based on the current situation. According to the published government data, the fluctuation of the stock market more reflects the future earnings of the company, and the analyst's forecast can last for three to five years. In some specific market environment, the current economic situation is not always consistent with the expected corporate profits, which will lead to the disconnection between the economy and the stock market. People may be too optimistic or too pessimistic about the company's prospects. As the legendary investment guru Peter Lynch said, the mistake of many fund managers is to concentrate too much energy on the macroeconomic level. The relationship between corporate profitability and economic growth is not only an intuitive linear relationship or a simple causal relationship, but also different companies have different sensitivities to economic conditions. Whether we can successfully separate the subtle clues between individual companies and the economic situation is the test and challenge to investors' eyesight, skill and endurance!

The stock market bubble in the late 1991s made the best footnote for this. People are full of expectations and superstitions about the Internet, a new thing, which makes it a hotbed of bubbles. Coupled with the "popularization effect", "lock-in theory" and "new economic theory", people have illusions and illusions about the company's future profit prospects, and even fantasize. But as everyone knows, this unrealistic market expectation is just a dazzling mirage, lacking both market, technology and capital. It is no wonder that the bursting of its bubble will lead to the collapse of global stock markets, which will make investors suddenly wake up from Nanke's dream.

Coincidentally, it is not the first time and will not be the last time that this kind of economy runs counter to the stock market in American history. From 1973 to 1974, there was a similar effect, and the degree of dispersion was not lower than this time. The Dow Jones Industrial Average plunged 45% in less than two years, although the economy increased by 15% in the same period, which greatly exceeded the 7.7% this time (admittedly, the inflation rate in that year was not comparable to today). Fortunately, this pain lasted less than two years and then quietly disappeared into history, which was half a year shorter than the stock market crash.

The reason why the stock market was quite different from the economic trend in those years was that the oil crisis in the Middle East at that time made people look forward to the future and shudder. The immediate economic growth can't resolve and hide people's worries about the company's future prospects at all. Especially at that time, the inflation rate was as high as 11.5% on average, which greatly weakened the purchasing power of the people and the profit rate of the company. Many people have begun to feel uncomfortable that the price of oil may soar to $111 a barrel. Sure enough, the global vicious economic recession came quietly in the second half of 1974.

fourthly, the whole national economy and some listed companies.

the asymmetry between the economy and the stock market will also contribute to the deviation between them. For example, the economic structure of the United States includes two categories: PrivateSector and PublicSector. The former accounts for about 71% of the economy, that is, listed companies only create two-thirds of the GDP, while the rest comes from government agencies. This leads to the fact that only two-thirds of listed companies may not always accurately reflect the whole national economy. When the behavior of enterprises and the government tends to be the same, the stock market and economic development go hand in hand; When the two are discrete, the difference between them is inevitable.

the changes in the past few years are one of the evidences. On the one hand, a large number of companies and enterprises are in dire straits due to overstock and overcapacity. On the other hand, the financial expenditure of the federal government and governments at all levels is expanding rapidly to fight terrorism and stimulate economic growth. As a result, government investment has become the main supporting force of the economy, which is reflected in the sharp turning point of the federal government from huge surplus to huge deficit. The sharp increase of government expenditure is in sharp contrast with the recession of private enterprises, and it also creates a strong contrast between the economy and the stock market. The moderate growth of the economy mainly comes from the 31% of the GDP that is created by government investment and cannot be represented by listed companies. Therefore, the economic growth in the past three years is just an illusory illusion, which covers up the plight and sadness of many listed companies under siege.

this kind of economy and stocks