Hey everybody, listen up! Great news! The Dow Jones industrial average and the S&P 500 both hit record highs last week! Isn’t that terrific?! Aren’t you thrilled?!
Hmm. Apparently not.
If it was possible for a story once deemed to be of huge national importance to generate less of a public buzz than the stock market’s recent performance, it’s not coming readily to mind. Individual news stories come and go, controversies flare up and fade away, fads and trends become the stuff of nostalgia, even international conflicts over time retreat to the inside pages.
But the stock market is supposed to be a perpetual story. Is it up or down? What’s it saying about how the economy is performing? What’s it predicting about where the economy is going? What sectors are doing well? Which ones are struggling? What are the emerging companies and industries? Who’s the next Microsoft or Amazon? Which is the next Washington Mutual?
These days, you can get a conversation, or fight, started on a long list of topics. The stock market isn’t one of them. People are paying attention to, and can quote you the latest on, the price of local residential real estate or a gallon of gasoline. But the days in which even casual observers could give you at least an approximation of where the Dow, the best-known market index, sat at the moment appear to be long gone.
This shift is a bit jarring to veterans of the business-news business who remember the heady days of bull markets when everybody wanted in, when day-trading represented a promising occupational opportunity, when readers would call in after the publication of a feature story about an interesting company, asking how to buy stock in it (even if it was nowhere near going public). You hardly needed to spell out the acronym IPO. Everyone knew it stood for initial public offering; what they wanted to know was how to get their hands on the latest, even if they were a bit uncertain as to what the issuing company actually did.
The fixation on the market was no less intense during the markets’ occasional swoons. People wanted to know whether to bail or go bottom-fishing. They lamented the state of their IRAs and 401(k)s (two more terms you didn’t need to define) as they tried to sort the component companies into those doing well, those having a temporary setback and those in a true death spiral.
The public’s fascination with and focus on the market wasn’t solely the product of get-rich-quick dreams, although that no doubt played a part. People had significant practical reasons for caring what the market was doing. Stock options and grants were a big part of compensation in industries such as tech. The aforementioned retirement plans replaced, at many firms, the traditional defined-benefit pension. Those everyday investors weren’t playing the market; their financial futures were riding on it.
And yet, the markets have recovered from the depth of the recessionary trough, and not many people are noticing, much less expressing optimism, pessimism or relief.
Here are some guesses as to why that is:
▪ There’s other news to focus on, like the unraveling of civil society and the looming presidential-election debacle.
▪ There have been downturns before, but having been scalded in succession by the dot-com bust and then the housing-driven market-meltdown and recession, many investors are unconvinced that the market’s rebound is real or durable. You can find plenty of speculation from market pundits that concurs with that assessment.
▪ Many everyday investors have concluded that there’s little room for them in markets where so much of the trading is dominated by flash transactions, and that there’s no return in trying to pick individual stocks, an activity at which even the professionals aren’t all that good. Better to park the money in a low-cost index fund and get on with life.
▪ The public feels little direct connection with the market. Tacoma and Pierce County were never big centers for publicly traded companies, although over the years the region spawned at least one big firm (Weyerhaeuser) as well as one global outfit deeply connected with the market (Russell).
But over the years, through mergers, moves and failures, the list of area-based publicly traded companies that are gone has grown to more than a dozen entries. The absence of such companies chops away one more reason for people to care what’s going on in the market.
We’ll find out just how permanent and deep the public disconnect with the market is when the inevitable slump comes. It may be greeted with a shrug just as the current run has, or the public will decide it has reason to care how the market is doing. In which case, we’ll have cause to break out the exclamation points again.
Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at email@example.com.