Re: Re: Tide turning for Spain’s economy?


@Rocker wrote:

I wonder whether a country’s rising stock market reflects on its prosperity. It is, after all, a judgment from the rest of the world, usually.

The Ibex did start from a low base last summer, but it’s rocketing upwards now.

The perceived wisdom is that the stock exchange normally predicts what will be the state of the economy in 6 months time. Generally it’s big investors like pension funds who invest in the stock market, hoping to get far better returns than elsewhere. Plus they try and guess the tipping point to pull out or to invest again.
Having said all that, dealers make a lot of money both out of falls and rises. I wonder if there isn’t a large amount of following the crowd, with the current rise, similar to the fall last summer. They always say you should follow the trend, but I would always be fearful of missing the change in sentiment.