U.S. Stock Market: Easy Money Era and Future Predictions

The U.S. stock market's future hinges on corporate profitability, not just liquidity, amidst evolving AI-driven ecosystems.

### The U.S. Stock Market and Easy Money
The U.S. stock market is closely tied to the Federal Reserve's interest rate decisions, with a **rate cut expected around September 20**. Despite the anticipation of lower interest rates and increased money circulation, the stock market has **struggled to recover since its peak in July**. The concept of easy money, characterized by **ultra-low interest rates and quantitative easing**, has been prevalent for the past **10 to 15 years**, raising expectations for a **return to this era**.

### The Dramatic Increase in Nasdaq Companies' Revenue
The revenue of Nasdaq companies **surged from 18.9 billion dollars in 2010 to nearly 4 trillion dollars by 2019**, and then **surpassed 7 trillion dollars by 2023**. The U.S. GDP and money supply also experienced significant growth during this period. The Nasdaq 100 companies had the highest stock price return, with an **annual growth rate of 16.4%** over the past 10 years, and the pandemic period saw a notable increase in **operating profit margins and money circulation**.

### The Importance of Profitability and Money Supply in Stock Prices
Companies need to make **significant profits** to distribute to investors, making profitability indicators like the **operating profit margin** crucial. During the pandemic, the operating profit margin increased, but the **stock price return** did not rise as much as expected. The increase in money supply during the pandemic played a significant role in **boosting stock prices**, contributing to the overall rise in **profitability and stock market performance**.

### The Impact of Money Supply and Corporate Profitability on Stock Prices
The difference between stock price, stock return multiples, and operating profitability is only **0.14**, while the money supply increased significantly during the same period. The pandemic led to a surge in company profits, raising stock prices, and causing market anticipation for a **rate cut and an easy money era**. However, post-pandemic, corporate profitability, driven by companies like NVIDIA, has been the main factor determining stock prices, despite the company's recent strong performance not translating to a **stock price increase**.

### Nvidia's Recent Performance and Future Expectations
Nvidia's net profit has remained steady, with a **significant boom since the emergence of ChatGPT**. The company is expecting to release the **Black AI accelerator by the end of the year**, which is anticipated to drive further growth. Despite a strong stock performance over the past year, recent challenges and high market expectations have led to a **sluggish recovery**, prompting Nvidia to buy back **$50 billion of its own shares** to stabilize the situation.

### The Impact of AI on the Economic Landscape
The AI-driven ecosystem is heralding a **new technological revolution** with a significant impact on **corporate performance and stock prices**. Despite a recent surge in revenue, factors affecting growth rates are causing **uncertainty in investments**, particularly for high-tech companies. The potential for a **larger-than-expected interest rate cut** raises concerns about **economic confidence** and its impact on the stock market, highlighting the need for a **confirmed industrial ecosystem led by AI** to reduce market uncertainties.

### The U.S. Stock Market: Anticipations, Easy Money, and Corporate Profitability
* 📈 The U.S. stock market is a **crucial indicator** for both the U.S. financial landscape and global markets, with significant attention on the **potential interest rate cuts** expected around **September 20**.
* 💰 The Federal Reserve's anticipated interest rate reduction, whether by **0.25% or 0.5%**, could inject more money into the economy, potentially benefiting the stock market, yet stock prices have remained **sluggish since their peak on July 10**.
* 📊 This prolonged underperformance raises questions about why the stock market isn't responding positively to the expected rate cuts, leading to discussions about the concept of "**easy money**" and its implications.
* 📉 Over the past decade, the Nasdaq companies have seen their operating profits **skyrocket from approximately $18.9 billion in 2010 to nearly $4 trillion by 2019**, and further surpassing **$7 trillion in recent years**, reflecting **substantial growth**.
* 🤑 Despite the increase in profitability, stock prices have not mirrored this growth, with the Nasdaq 100 demonstrating the **highest returns**, yet concerns linger about the **sustainability of this growth** amid economic uncertainties.
* 🤖 The emergence of AI, particularly through companies like NVIDIA, highlights the **new industrial ecosystem driving corporate profitability**, although recent performance reports indicate a **potential slowdown in growth expectations**.
* ⚖ Investors are cautioned against overly focusing on liquidity, as a **significant rate cut could signal economic weakness rather than strength**, potentially leading to a **negative impact on the stock market**.
* 🔍 Ultimately, the future of the U.S. stock market hinges on the **confirmation of AI leadership** and the **establishment of a new industrial ecosystem**, as uncertainties continue to shape investor sentiment.

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