The New York times raised an interesting question the other day, calling into question the very fact of the market’s existence, noting that “with the economy in free fall, the resilience of share prices defies the misfortunes of most Americans.”
Here’s a bit of the story:
“By then, the market’s rebound had become a source of morbid fascination for many. How could it be that stocks were heading higher — after a steep sell-off, of course — in the face of a global pandemic and what’s shaping up to be the worst economic downturn since the Great Depression? Wall Streeters were quick with answers: The Federal Reserve was pumping more than $1 trillion into the markets to stave off a financial meltdown, and besides, with bond yields at record lows, investors didn’t really have any palatable alternatives to stocks as places to put their money. Still, it was jarring, even macabre, to watch the market soar while tens of thousands of Americans were dying of Covid-19 and millions were losing their jobs as a consequence of the nation’s economic shutdown.
“In the years since the Great Recession, Silicon Valley had eclipsed Wall Street as an object of public ire. But with the market’s unseemly rise, investment banks and hedge funds appear determined to become the villains of this crisis, too. While tech giants like Amazon, Apple and Google have been helping to make life under lockdown somewhat more bearable — and going some way to redeem Silicon Valley’s image — the stock market’s shocking resilience (at least so far) has looked an awful lot like indifference to the Covid-19 crisis and the economic calamity it has brought about. The optics, as they say, are terrible. And they can’t help inviting a broader discussion about the market’s role in American life.”
As a reader, this is a fascinating story, a thought piece that really digs into what we all have assumed is an inevitable reality of life in the U.S. That stocks would rise and their movements would track the status of our national economy.
But what if that isn’t true? What if the disconnect between Main Street and Wall Street has gotten so large that the two don’t even exist in the same reality anymore.
What happens then?
Here’s the real takeaway for me, though: This is a new challenge for communications.
Those in the financial services space really need to learn how to communicate what they’re doing and why it matters, to all of us not just those on the inside.
Because, yes. The “closure of a corner coffee shop [means] one less competitor for Starbucks,” but that’s a net negative for everyone but Starbucks. The neighborhood loses a local option, a few people lose their jobs and SBUX share price ticks up a few points.
For a long time, this sort of financial disconnect was accepted with a shrug and an “oh well.” That was just the way things go. And it is still the way things go, but now more than even people are taking notice.
Social media has extended these conversations beyond the dinner table. Digital platforms are putting the 24/7 drumbeat of finance front-and-center for tens of millions of people. And the backlash is no surprise.
I’d be interested to hear from those in the industry. What are you hearing from your own customers? How are you staying relevant to them?