Corporate profits need to rise? Am I missing something?

[Anonymous]

Stocks are expensive. At some point profits need to rise. However, for profit to rise, shouldn't companies have to cut cost? And isn't labor going to be the first casualty?

I'm just trying to make sense why is everyone so confident about this never ending rise in the stock market.

I don't want to be a pessimist, but I foresee a jobless recovery. I have the feeling that this low job environment we are in may be the new normal until companies especially the ones with ridiculous stock appreciation start showing massive profits.

For the record I am not an economist, a psychic, a market timer etc ....I am just your boring guy with money in a index fund on cruise control....But I am just curious because I feel this time it's different. I'm just not sure jobs will be as plentiful as we move forward...

[Anonymous]

Americans can't survive without a job. In other countries it's possible for awhile. In the US no way.

[Anonymous]

Yes. AI replacing easy things like HR. Making people even more efficient. Cutting training budgets for young staffers etc etc.

[Anonymous]

Anonymous wrote:Stocks are expensive. At some point profits need to rise. However, for profit to rise, shouldn't companies have to cut cost? And isn't labor going to be the first casualty?

I'm just trying to make sense why is everyone so confident about this never ending rise in the stock market.

I don't want to be a pessimist, but I foresee a jobless recovery. I have the feeling that this low job environment we are in may be the new normal until companies especially the ones with ridiculous stock appreciation start showing massive profits.

For the record I am not an economist, a psychic, a market timer etc ....I am just your boring guy with money in an index fund on cruise control....But I am just curious because I feel this time it's different. I'm just not sure jobs will be as plentiful as we move forward...

A jobless “recovery” … from what? I mean, Trump is tanking the economy but …

All of this run up is forecasting the value generative and genetic AI are going to bring.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Stocks are expensive. At some point profits need to rise. However, for profit to rise, shouldn't companies have to cut cost? And isn't labor going to be the first casualty?

I'm just trying to make sense why is everyone so confident about this never ending rise in the stock market.

I don't want to be a pessimist, but I foresee a jobless recovery. I have the feeling that this low job environment we are in may be the new normal until companies especially the ones with ridiculous stock appreciation start showing massive profits.

For the record I am not an economist, a psychic, a market timer etc ....I am just your boring guy with money in an index fund on cruise control....But I am just curious because I feel this time it's different. I'm just not sure jobs will be as plentiful as we move forward...

A jobless “recovery” … from what? I mean, Trump is tanking the economy but …

All of this run up is forecasting the value generative and genetic AI are going to bring.

Yes. At the moment there is nothing to recover from. Economy is not in bad shape. Not going gangbusters either and could be headed down. That has to happen first before there is a recovery.

Corp profits are solid but that all could change. Sure stocks are expensive. Is it never ending increases -- no. But as to where it is going who knows.

[Anonymous]

It’s a bubble

[Anonymous]

I don't think we are in a bubble. We are now in an easing cycle. How fast the easing will be it depends on the Fed. So we have a tailwind and the AI boom is real...just look at data center roll out, energy spiking, and utilities earnings. Unemployment is still low...not too troubling. We have pissed off the world but the entire world is also in an easing cycle so even internationally there is a tailwind. While gold, bitcoin, and crypto assets (non income producing) have gone through the roof this year because of the crazy policymaking coming out of DC, I think 2026 will be a good year for stocks. Let's see.....

[Anonymous]

Anonymous wrote:I don't think we are in a bubble. We are now in an easing cycle. How fast the easing will be it depends on the Fed. So we have a tailwind and the AI boom is real...just look at data center roll out, energy spiking, and utilities earnings. Unemployment is still low...not too troubling. We have pissed off the world but the entire world is also in an easing cycle so even internationally there is a tailwind. While gold, bitcoin, and crypto assets (non income producing) have gone through the roof this year because of the crazy policymaking coming out of DC, I think 2026 will be a good year for stocks. Let's see.....

I don’t claim to know when or how it will unwind but I don’t what you mean by “the AI boom is real” — it’s huge investments desperately hoping for revenue.

This is a pretty interesting writeup looking at the vast numbers that would be needed to justify the current investments in data centers—

https://pracap.com/an-ai-addendum/

[Anonymous]

AI is the answer why Wall Street isn’t collapsing under Trump’s utter incompetence. But it won’t be able to overcome the rest of the economy’s weakness.

For instance, people “buying groceries now, and paying later” has increased. No they aren’t using credit cards…they are using loans. How Fked is that?

https://www.cnbc.com/2025/04/26/americans-groceries-buy-now-pay-later-loans.html

[Anonymous]

OP - everything is different now on so many levels. There's AI but there's Trump as POTUS.

The market is acting irrational because he is. Folks have learned to buy during dips when he makes dumb announcements. The market is reacting. You have to take that into consideration.

I agree that this time around, the rebound is going to take time and be interesting in how it will rebound. I'm not an econ and just someone who has their own business and recruits talent for all sorts of companies and career coaches executives. I think that the way of doing business is changing.

There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well. For most people, things haven't gotten really bad yet. That's next year. Even then, there's a number of sectors that are still reasonably healthy. Those who have a paycheck will continue doing well.

I think moving forward, what we're going to see is the disparity of those who have a lot v little get larger. There will be a lot of sad, poor folks and a lot of rich, lucky folks. There's going to be things that certain people won't be able to enjoy anymore that they never considered they wouldn''t.

It'll be a tough time for a larger segment of American society and it will be permanent.

[Anonymous]

Anonymous wrote:OP - everything is different now on so many levels. There's AI but there's Trump as POTUS.

The market is acting irrational because he is. Folks have learned to buy during dips when he makes dumb announcements. The market is reacting. You have to take that into consideration.

I agree that this time around, the rebound is going to take time and be interesting in how it will rebound. I'm not an econ and just someone who has their own business and recruits talent for all sorts of companies and career coaches executives. I think that the way of doing business is changing.

There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well. For most people, things haven't gotten really bad yet. That's next year. Even then, there's a number of sectors that are still reasonably healthy. Those who have a paycheck will continue doing well.

I think moving forward, what we're going to see is the disparity of those who have a lot v little get larger. There will be a lot of sad, poor folks and a lot of rich, lucky folks. There's going to be things that certain people won't be able to enjoy anymore that they never considered they wouldn''t.

It'll be a tough time for a larger segment of American society and it will be permanent.

You didn’t need to tell us you are HR, we all knew when you said, “ There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well.”

Were you a child when the financial crisis in 2008 hit?

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP - everything is different now on so many levels. There's AI but there's Trump as POTUS.

The market is acting irrational because he is. Folks have learned to buy during dips when he makes dumb announcements. The market is reacting. You have to take that into consideration.

I agree that this time around, the rebound is going to take time and be interesting in how it will rebound. I'm not an econ and just someone who has their own business and recruits talent for all sorts of companies and career coaches executives. I think that the way of doing business is changing.

There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well. For most people, things haven't gotten really bad yet. That's next year. Even then, there's a number of sectors that are still reasonably healthy. Those who have a paycheck will continue doing well.

I think moving forward, what we're going to see is the disparity of those who have a lot v little get larger. There will be a lot of sad, poor folks and a lot of rich, lucky folks. There's going to be things that certain people won't be able to enjoy anymore that they never considered they wouldn''t.

It'll be a tough time for a larger segment of American society and it will be permanent.

You didn’t need to tell us you are HR, we all knew when you said, “ There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well.”

Were you a child when the financial crisis in 2008 hit?

Not PP but that does not seem likely -- repeat of 2008. As another PP said things are not that bad and in fact are strong in many areas. AI is helping but that is not the only sector doing just fine. AI revenue is here -- they are not building looking for revenue. AI is in and will be in almost everything we do. I am not a fan but it is here to stay.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - everything is different now on so many levels. There's AI but there's Trump as POTUS.

The market is acting irrational because he is. Folks have learned to buy during dips when he makes dumb announcements. The market is reacting. You have to take that into consideration.

I agree that this time around, the rebound is going to take time and be interesting in how it will rebound. I'm not an econ and just someone who has their own business and recruits talent for all sorts of companies and career coaches executives. I think that the way of doing business is changing.

There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well. For most people, things haven't gotten really bad yet. That's next year. Even then, there's a number of sectors that are still reasonably healthy. Those who have a paycheck will continue doing well.

I think moving forward, what we're going to see is the disparity of those who have a lot v little get larger. There will be a lot of sad, poor folks and a lot of rich, lucky folks. There's going to be things that certain people won't be able to enjoy anymore that they never considered they wouldn''t.

It'll be a tough time for a larger segment of American society and it will be permanent.

You didn’t need to tell us you are HR, we all knew when you said, “ There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well.”

Were you a child when the financial crisis in 2008 hit?

Not PP but that does not seem likely -- repeat of 2008. As another PP said things are not that bad and in fact are strong in many areas. AI is helping but that is not the only sector doing just fine. AI revenue is here -- they are not building looking for revenue. AI is in and will be in almost everything we do. I am not a fan but it is here to stay.

Here’s another article about Bain saying the revenue just isn’t there to support current levels of AI investment (not that there isn’t any revenue but it’s not matching the scale of investment).

https://finance.yahoo.com/news/800-billion-revenue-shortfall-threatens-010000322.html

These are not Luddites making these arguments— it’s basically anyone willing to sit down and do the math. Maybe the USG decides it will dump even more subsidies into AI to prop things up but absent that there will be a moment of truth/reckoning.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP - everything is different now on so many levels. There's AI but there's Trump as POTUS.

The market is acting irrational because he is. Folks have learned to buy during dips when he makes dumb announcements. The market is reacting. You have to take that into consideration.

I agree that this time around, the rebound is going to take time and be interesting in how it will rebound. I'm not an econ and just someone who has their own business and recruits talent for all sorts of companies and career coaches executives. I think that the way of doing business is changing.

There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well. For most people, things haven't gotten really bad yet. That's next year. Even then, there's a number of sectors that are still reasonably healthy. Those who have a paycheck will continue doing well.

I think moving forward, what we're going to see is the disparity of those who have a lot v little get larger. There will be a lot of sad, poor folks and a lot of rich, lucky folks. There's going to be things that certain people won't be able to enjoy anymore that they never considered they wouldn''t.

It'll be a tough time for a larger segment of American society and it will be permanent.

You didn’t need to tell us you are HR, we all knew when you said, “ There's 2 things to look at - the market isn't going to tank, those with money will float it and they will likely do really well.”

Were you a child when the financial crisis in 2008 hit?

Not PP but that does not seem likely -- repeat of 2008. As another PP said things are not that bad and in fact are strong in many areas. AI is helping but that is not the only sector doing just fine. AI revenue is here -- they are not building looking for revenue. AI is in and will be in almost everything we do. I am not a fan but it is here to stay.

It may (or may not be a repeat of 2008) but smart people are pointing out that AI is a bubble that will have economic repercussions.

Hedge fund manager Mark Spitznagel is warning that the U.S. economy under Trump could face a huge crash, possibly the biggest since the 1929 Wall Street Crash. Spitznagel is called the “crash guy” or “Black Swan” investor because he has built a reputation for predicting and profiting from market collapses

Read more at:
https://economictimes.indiatimes.com/news/international/us/wall-street-legend-predicts-trumps-economy-could-be-headed-for-a-big-crash/articleshow/124071512.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst