U.S. Money Supply Did Something 2 Years Ago That Was Last Witnessed During the Great Depression -- and It Historically Foreshadows a Big Move in Stocks
The last time M2 money supply made this big of a move was in 1933.
For more than two years, the bulls have been running wild on Wall Street. Since the curtain opened for 2023, the iconic Dow Jones Industrial Average (DJINDICES: ^DJI), broad-based S&P 500 (SNPINDEX: ^GSPC), and growth stock-dependent Nasdaq Composite (NASDAQINDEX: ^IXIC) have respectively risen by 31%, 55%, and 82%, with all three indexes notching multiple record-closing highs.
But while the stock market has been an undisputed long-term wealth creator, history shows that it doesn't move up in a straight line. Investors are constantly looking for data points and metrics that can forecast short-term directional shifts in the Dow Jones, S&P 500, and Nasdaq Composite.
Even though there's no such thing as the perfect data point that can concretely predict short-term moves in the stock market, there are a small number of events, data points, and predictive indicators that have strongly correlated with big moves higher or lower in Wall Street's major stock indexes. It's these highly correlative data points that typically garner the most attention and raise investors' eyebrows.
