Why is the stock market a barometer of the economy?

The stock market is a barometer of the economy. In China, this view does not hold water.

What is a barometer? This is a barometer for forecasting the weather. The barometer obviously predicts the recent weather changes, not decades later. Looking up historical data, we can find that the stock market is not a barometer of the economy at all, and it is impossible to predict the development and changes of the economy, which is very inconsistent with the economic development trend.

At present, it is obviously difficult for China stock market to become an economic barometer, which is related to major institutional changes and cannot be explained by macroeconomics. On the other hand, it happens that China's economy is in the range of declining growth rate, and the tightening of policies has caused psychological pressure on investors. The immature stock market is too sensitive. Coupled with the lack of stock market analysts, the stock market performance is sluggish.

The statement that the stock market is an economic barometer is very unreliable. The collapse of the big bull market can induce an economic crisis, which may mean that the stock market is one of the bases of the economic barometer. But after all, there are few big crashes, and the performance of the stock market is out of sync with economic development most of the time. The frequent deviation between the stock market and the economic situation is really difficult to support the "barometer" view.