{"id":4100,"date":"2026-04-17T04:13:42","date_gmt":"2026-04-17T04:13:42","guid":{"rendered":"https:\/\/stock999.top\/?p=4100"},"modified":"2026-04-17T04:13:42","modified_gmt":"2026-04-17T04:13:42","slug":"americans-have-never-been-this-gloomy-about-the-economy-wall-street-has-never-cashed-in-more","status":"publish","type":"post","link":"https:\/\/stock999.top\/?p=4100","title":{"rendered":"Americans have never been this gloomy about the economy. Wall Street has never cashed in more"},"content":{"rendered":"

<\/p>\n

The S&P 500 punched through 7,000 to a fresh all-time high. Goldman Sachs posted its second-highest quarterly revenue on record. Morgan Stanley\u2019s equities desk set a record of its own. JPMorgan, Bank of America, and Citigroup all notched records in stock trading.<\/p>\n

Wall Street is riding high on the coattails of the war in Iran. But Main Street feels like it\u2019s drowning in it. Much has been written about the K-shaped economy, but there\u2019s something tangibly different about this particular divergence: It\u2019s happening at a time when President Donald Trump and his cabinet are sowing enormous uncertainty and volatility around the war, and isn\u2019t it classic wisdom that Wall Street is allergic to uncertainty? How could a conflict that has shut down one of the world\u2019s most important oil choke points for months and triggered what the International Energy Agency keeps calling the worst energy crisis ever, not hinder the bull run?<\/p>\n

While analysts puzzle over the question, many online say they already have the answer: Trump is manipulating the markets. What finance types call \u201cjawboning\u201d looks, to the average person scrolling X, like clear evidence of a president riling markets up over the weekend to create a dip\u2014one that smart money (and Trump-associated insiders, these arguments go) will buy and ride to the top. But one top economist says the answer is simpler than that.<\/p>\n

\u201cStock markets respond to risks shifting around,\u201d said Claudia Sahm, chief economist at New Century Advisors and inventor of the famous Sahm rule for recessions. \u201cHouseholds respond to reality.\u201d<\/p>\n

Volatility is the product<\/p>\n

Since the post-2008 financial reforms, Wall Street\u2018s trading desks have been rebuilt around client facilitation. They don\u2019t make money when markets go up; they make money when clients trade. And clients trade when prices move\u2014it doesn\u2019t matter the direction. The Iran war, the oil shock, the Liberation Day whiplash, the Greenland threats, and the Venezuela operation: Each is a reason for an institutional investor to pick up the phone and reposition. Volatility is the product.<\/p>\n

That\u2019s how you get a week in which Bank of America\u2019s stock-trading desk posts its highest quarterly revenue in nearly two decades; Morgan Stanley\u2019s equities desk sets a record; Goldman beats estimates; and the five biggest banks collectively are on track for more than $40 billion in first-quarter trading revenue, roughly 13% above last year.\u00a0<\/p>\n

The consumer has no equivalent machinery. The University of Michigan\u2019s preliminary April consumer sentiment reading came in at 47.6, a 10.7% drop from March and the lowest in the index\u2019s history, worse than the June 2022 trough that Republicans used as a cudgel against Biden for two straight election cycles. The decline cut across age, income, and party.\u00a0<\/p>\n

And Sahm told Fortune the gloom isn\u2019t just about this spring.<\/p>\n

\u201cIt\u2019s not just about the last hit to their finances,\u201d she said. \u201cIt\u2019s a period of time over the last five years\u2014there\u2019s just been one disruption after another, and it builds up.\u201d<\/p>\n

Americans are exhausted from the pandemic, the 2022 inflation surge, tariffs. And now, a war that has pushed gas to a national average of $4.16. While the stock market zooms out to a 12-month horizon, the consumer is stuck in the lived reality of the status quo.\u00a0<\/p>\n

Who actually owns the rally<\/p>\n

It\u2019s also worth asking who, exactly, is long the S&P at 7,000. The wealthiest 10% of American households own roughly 93% of equities. Bank of America\u2019s own research team published a chart this week that drew the K in its starkest terms: Discretionary spending among higher-income households is actually rising, buoyed by tax refunds from last year\u2019s One Big Beautiful Bill Act, while lower-income households are getting squeezed by gas prices they can\u2019t absorb.\u00a0<\/p>\n

\u201cThe gas price shock puts greater strain on discretionary spending by lower-income households,\u201d BofA analyst Shruti Mishra wrote, \u201csince they spend a larger share of their income on gas and save less.\u201d<\/p>\n

There\u2019s one word we\u2019ve heard trading desks use to describe consumers through all the inflation hikes: resilient. It is true consumers have miraculously buoyed the economy by spending throughout it all. But that lift isn\u2019t lasting forever. Goldman Sachs cut its 2026 consumption growth forecast from just over 2% to 1.2%, citing the hit to real disposable income from higher gas prices.\u00a0<\/p>\n

\u201cThe consumer is not as resilient as it was back when Russia invaded Ukraine,\u201d Sahm said. \u201cThat was a much stronger labor market. Consumer balance sheets were better. That\u2019s just not the case now.\u201d<\/p>\n

Which raises another question: If American consumers are running out of road, and the S&P\u2019s forward earnings estimates assume they aren\u2019t, what happens when the two have to meet? \u201cWe\u2019re in a place where there\u2019s enough broad-based slowing that I expect this to make a dent in consumer spending,\u201d Sahm said. \u201cThat could be a speed bump for the stock market, and that is not my impression of what is baked into the earnings estimates.\u201d<\/p>\n

The market manipulation question<\/p>\n

And then there is the question that social media is obsessed with: \u201cmarket manipulation.\u201d Sahm is careful with the term. <\/p>\n

\u201cThat\u2019s a very specific thing,\u201d she said; it denotes whether or not someone on the inside can time trades based on the information they exclusively have.<\/p>\n

And to be sure, insider trading may have been part of some of the big swings. The Commodity Futures Trading Commission is investigating at least two instances where oil futures volume surged in the minutes before Trump announced major Iran policy pivots, according to Bloomberg.\u00a0<\/p>\n

But broadly, as to the question of jawboning, Sahm says it\u2019s not so unusual.<\/p>\n

\u201cThere is a conversation he\u2019s having with markets, and he\u2019s listening to markets,\u201d she said of the president. Trump\u2019s maximalist style\u2014threaten annihilation, then walk it back, then threaten again\u2014has trained investors to buy the dip on the retreat, because the retreat always comes.<\/p>\n

\u201cInvestors who missed out on the post\u2013Liberation Day recovery because they got scared don\u2019t want to miss out this time,\u201d Sahm said. \u201cAs soon as it looked like the worst case was off the table, the stock market was just off and running.\u201d<\/p>\n

But Sahm offered one note of caution that runs counter to the rally. <\/p>\n

\u201cI kind of worry about the day where markets completely ignore him,\u201d she said, \u201cbecause then we\u2019re in a place where this has really gone off the road.\u201d<\/p>\n

#Americans #gloomy #economy #Wall #Street #cashed<\/p>\n","protected":false},"excerpt":{"rendered":"

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