Economist Lacy Hunt pointed out that recent post covid...

Economist Lacy Hunt pointed out that recent post covid restocking of the auto dealerships from depleted levels due to supply disruption was equivalent to 2% of US GDP. Normal stock levels are now in place. So that boost and its considerable multipier effect is over. Without it, GDP is back to around zero. Just one of a number of temporary factors that have delayed the recession and boosted markets.

Others include:-
- Post gilt crisis central banks increase in liquidity-
- Post SVB BTFP rseponse - more liquidity and soften of risk perceptions
- Historical reliable Presidential cycle market trend October 2022 to April 2023 (well before election)
- Housing stock shortage
- Stimulus work through
- Companies who refinanced / borriwed at low rates and have capital still unspent getting short term benefit of higher rates - one calculation has been that what would normally be a -10% profit impact across economy from higher rates on company profit levels has been a +5% boost.
- Lack of mark to market in CRE
- AI hype
- Retail conviction that they picked it better than many experts in 2020 and are now doing so again is stoking their optimism. That is fragile and not what 100 years of market history has demonstrated as the norm.

The fading of many coinciding short term positive effects is now occurring.