|
|
This chart shows the stock market (S&P 500 index) from 1900 to 2010. The color overlay is the 10 year average economic growth (US Gross Domestic Product in current dollars). Average GDP growth above 10% is red, below 5% is blue. The last data point: S&P 2009 close at 1115 and average GDP growth from 1999 to 2009 was 4.3% (blue). The insight from this chart is that Main Street seems to lead Wall Street. From the Efficient Market Hypothesis (EMH) you would expect the colors to be more or less randomly spread across the curve. Instead, historical GDP data seems to give some informaton on the future direction of the S&P 500 stock market index. |