Op-ed:
Tying
the Economy and Stock Market Together
By:
Diane Sori / The Patriot Factor
This opinion piece is my opinion alone, and does not necessarily
represent the views of blogspot.or google.com.
Last
week I put up a post on a few social media sites stating that the
“stock market” is down almost across the board, and that
it’s because President Trump refuses to do what even he has to know
needs to be done in regards to Iran.And
while the majority of those who read my post did agree with my
statement others did not...as is their right...as they either have no
idea that the “stock market” is both a key indicator of
how our American economy is doing and thus affects the pocketbooks of
each and every one of us to some degree, or they simply don't care as
they still believe that the “stock market” only affects the rich and/or those who invest.
So
maybe it's time for a lesson in “Economics 101” on how the
“stock market” plays into it courtesy of five bonafide
facts...facts in simplified layman's terms of course.
Fact One: Over
the past 20 to 30 years there has been a tremendous increase in the
number of people...including young people...putting their monies into
the “stock market”
as opposed to a regular bank type savings account and/or a CD
(Certificates of Deposit) as was the case for most folks in the past.
Why so...because with today's interest rates remaining relatively low
in regards to buying a home...they currently, as I write this, hover
in the 6% range compared to the 1980s when said interest rates
reached 18.63%
on average...folks tend to forget that in turn the same interest
rates will remain low for CD's and for savings accounts as well. And
the consequences of this fact means that very little money...very
little profit...is being made off those entities, thus turning them
into basically negative yielding investments.
Remember, in the early 1980s, CD
rates were between 15% and 18%, and in some cases they topped 18.19%
if one had what was referred to as an ”Extended
CD” for over three
months or for over a year. For example, if someone had a $100,000 at
18% there was little to no monetary risks involved. However, over the
last 20 years the average CD rates have been between 0.1% and
5%...extremely low puts it mildly..,meaning putting money into a CD
with the hopes of making money was foolish indeed. And that’s why
over these past 20 years we’ve seen increasing numbers of people
from all walks of life putting their money into the “stock
market” so that
their money can actually start to work for them instead of into low yielding
savings accounts and IRAs.Fact
Two: The “stock market” today has now become a modern
day savings account of sorts, and it's not just for the rich any
more, but for middle and upper middle class families as
well...families who no longer believe that the traditional type of
savings account will help them to increase their wealth now or in the
future. And this makes perfect sense because when one invests in the
“stock market” one's money immediately starts working for
you which is simply not possible with bank driven low interest rates.
Fact
Three: Today, almost 62% of American adults currently have
some monies invested in the “stock market,” with the
number of middle-class and working-class Americans investing now up
54% as opposed to five years ago, with said number equating to those
who earn between a modest $30,000 to $80,000 per year.But
here one needs to understand that while one can make large sums of
money courtesy of wise investments, and sometimes in a relatively
short period of time...one can also lose large sums of money also in
a short period of time. How so? Simply, more times than not, it's
courtesy of a downturn in the economy coupled with rising inflation
numbers, as well as in times of war itself. And while wars...like the
Iran War we now find ourselves in...can and usually does lead to
short-term stock market “sell-offs,” hence
falling numbers, those drops in number are usually not long lasting, as historical data itself shows that geopolitical events,
like wars, usually do not have prolong effects on the trending course
of the “stock market” itself.
Fact
Four: However,
when times of war are combined with what is economic woes for the
majority of people...as in when both gas and grocery prices rise even
a small percentage...a “stock
market” drop
in numbers can be disconcerting for far too many folks, especially
those new to the market. And why so...because many new investors do
not understand that it's the economy itself that sets the stage for
both corporate performance and investor expectations, which in turn
then drives “stock
market”
trends,
and that it's how the “stock
market”
reacts
to said trends that directly influences consumer spending, all
important business investment, and overall economic sentiment, which
can include monthly “jobs
numbers.”
Simply,
the
“stock
market”
is
indeed a reflection of our county's economy and visa-versa.

Fact
Five: A president’s actions...no matter the political party
the president belongs to...no matter the political party in control of the Congressional “power of the purse string”...we still
find that both the economy and the “stock market” as being
affected by their fiscal and trade policies, their regulatory
decisions, their monetary policy appointments, their crisis managed
leadership, as well as by a healthy or, in some cases, an unhealthy
dose of public sentiment. And when combined together said
presidential actions do indeed help to influence both Congress and
the Feds, via their ability to shape both the policy environment and
the parameters that key markets (including the “stock market”)
and businesses operate within.Simply,
because presidents are responsible for implementing and enforcing the
law, they surely do have some control over business and market
regulations which in turn directly affects the economy itself, and
thus filters down to the “stock market.” In
President Trump's case think of his recent, what I consider to be,
high stakes tariff fiasco...the one where he raised tariffs so high
on certain countries doing business with the U.S. that said countries
literally could not afford to continue doing business here unless
said tariff raise was negated or at least neutralized. And how did
the countries affected accomplish this...simply by passing on to the
American consumer a price increase in the products being sold to
them.

Not
a good scenario indeed, yet a scenario that in many cases did happen
in the past and can still happen now or in the future what with the
economic buying power of many American families continuing to fall.
And when this continues over a period of time the “stock
market” is affected
as well. How so? When consumer
buying power is down the “stock
market” experiences
what is known as “increased
volatility,” because
reduced consumer spending lowers corporate revenues and hence profits
in a cause and effect scenario that tends to see overall stock
valuations dropping. And this is what leads some investors into a
panic mode, and thus “sell-offs” (as
devaluations) begin....a
vicious cycle indeed.Remember,
when the “stock
market”
drops
too fast
serious economic consequences can see the government possibly having
to raise taxes, which in and of itself is an obstacle to economic
growth. And this helps to tie the “stock
market” and the
economy together, as does war itself for uncertainty of a war's
outcome, coupled with the logistics of what would likely be rising
inflation,
tends to see panic driven “sell-offs,”
directly
affecting overall economic
conditions.
Drops
in the “stock market” are normal expected occurrences for
today's drop can easily turn into tomorrow's gain. But when the game
of war is thrown into the mix...in this case the war with Iran...the
tie between the “stock market” and the economy becomes
critical. Why so...because if said war does not turn out as we hope it does, the “stock market” could see gains being immediately wiped out
which in turn will affect our economy and “We the American
People” to a degree we have not seen in decades.As
a successful businessman President Trump knows all this...I just hope
his wish for a “deal”...a “deal” he's trying to make with terrorists...does not
backfire in his and our economic faces. Case closed.
Copyright @ 2026 Diane Sori / The Patriot Factor / All Rights Reserved.
************************************************************************************************** For more political commentary please visit my RIGHT SIDE PATRIOTS partner Craig Andresen's blog The National Patriot to read his latest article, The Caregiver's Revenge.
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RIGHT SIDE PATRIOTS...LIVE!
Tomorrow, Tuesday, June 9th from 7 to 8:30pm EST, RIGHT SIDE PATRIOTS Craig Andresen and Diane Sori discuss 'Tying the Economy and Stock Market Together'; 'The Caregiver's Revenge'; and important news of the day. Tune in to RIGHT SIDE PATRIOTS on https://rspradio1.com Click 'LISTEN LIVE.'