What does a booming stock market mean for most Americans?

Since COVID recovery kicked in, U.S. stock markets have soared. In 2024 the S&P500 went up by 24% and NASDAQ rose 31%! In 2023 U.S. stock markets rose by about 25%. It's incredible. The DJI is currently over 44,000. If you had a piece of this, you made out like a bandit. Such market success helps Americans in several ways, even the 40+% of us that do not even own stock even indirectly via retirement funds.

And of course, a healthy stock market reflects confidence in the future health of the companies that employ many of us. It can boost consumer confidence and have other second order effects.

Is a booming stock market an unalloyed good thing, though? Not if it is based on an unsustainable bubble, of course. But even "legit" stock booms do not lift all boats. Only about 20% of American adults directly own shares of stock, and most of that is owned by the top 4% at most. Close to one-half of full-time U.S. workers do not have even indirect stock ownership since they have no employer-supported retirement plan. Moreover, only about one-third of adults that work for businesses even work for publicly traded firms. As we will discuss, more and more of American business is in private hands, controlled by private equity funds and hedge funds. Many of the boats being lifted are yachts - and the yachts are getting bigger relative to most Americans' little dingys.

In this meeting, let's look more closely at issues like -

1. GOOD: What do stock prices measure? How do rising markets benefit regular people, including but not just employees of public companies? Direct ways vs. indirectly.
2. BAD/RISKY: Or are most stock market booms bubble-based these days? Even if not, do they fuel rising inequality and an out-of-touch financial/economic elite that is rapidly turning the USA into a full-blown plutocracy? Has 2021-24 been a bubble, based on AI or crypto or something else?
3. ALTERNATIVES? Are there any practical, feasible ideas to bring about the "ownership society" of widespread stock ownership that G.W. Bush talked a lot about 20 years ago but that never materialized?

A topic we've never done before!!

Optional Background Info -

Q1 - How do U.S. stock markets work?
-- Not how you think, probably. Automated, high-volume trades based on algorithms - increasingly derived by AI - account for 70% of all daily trading in U.S. stock markets. Also, the 10 largest stocks make up 30% of market capitalization.
-- But it’s not clear if this has decoupled stock values from the economy or from their true valuation.

Q2 - Which Americans own stocks?
-- About 60%, but most people own stock indirectly via retirement funds. Only about 20% of us own much stock shares directly, and there is huge inequality within that group and big racial/ethnic disparities. Details here. Recommended.
-- Democratization of stock ownership never happened, 2012: https://www.epi.org/publication/wealth-stock-market-holdings/

Q3 - So, who benefits from a booming stock market?
-- A standard answer: Booming stock markets usually are good, but even they leave many Americans out of gains. Recommended.
-- Could this be true? The top 4% wealthiest reap ALL the gains, at the expense of wages for almost everyone else!

Q4 – How does the economy affect stock mkt and vice versa?
-- The market reflects/correlates with the economy (GDP growth) pretty well. [long, technical].
-- How the Stock Market Affects the U.S. Economy. Leaves out a lot.

BTW: Trump inherited a historically strong economy. Will he wreck it?