Bloomberg Daybreak Asia: China Mulls US Trade Talks
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Yahoo
an hour ago
- Yahoo
A $900 Trillion S&P 500? Reddit Debates The Math Behind 10% Market Growth Rate For Another 30+ Years
An investor sparked a lively debate on Reddit's r/stocks after asking a simple but heavy question: How can the S&P 500 continue to grow at an average annual rate of 10% for another 30 years? The user pointed out that if the index maintains that pace, its market cap would double roughly every seven years, ballooning from $52 trillion today to around $900 trillion by 2055. That number sounded 'really stupid and impossible' to the original poster, who noted that with declining birth rates and slowing population growth, the math just didn't add up. "Where is all this money going to come from?" they asked. "Even if we assume inflation wipes out half of that $900 trillion in growth of the S&P 500 in today's money, that's still a ridiculous increase that makes no sense." Don't Miss: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." $100k+ in investable assets? – no cost, no obligation. But many Redditors disagreed or at least explained why it's not as crazy as it sounds. One of the top comments framed it this way: "In 1995 the S&P 500 market cap was ~$3T... Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL) today are all individually larger than the entire S&P 500 was in 1995. It's unfathomable." Several investors pointed out that this kind of growth has happened before and could happen again because of inflation, global expansion and major leaps in productivity. 'S&P500 companies don't only sell in America," one added. "All the big U.S. companies are just getting started with their globalization," pointing to China and India and their growing middle class. Another commenter chimed in: "Half the world's population lives on $7 a day, so I would say there is room for plenty of growth even if population growth slows down." Trending: The secret weapon in billionaire investor portfolios that you almost certainly don't own yet. Other Redditors were more skeptical. For example, one said that population growth, a major tailwind in the past, is slowing down significantly. "Returns will not be what they have been on a market-wide level," they argued. "Large companies finding increased markets via globalization will not be enough." Another user took issue with the assumption that historical trends will keep repeating. "You are assuming that the tailwinds of interest rates, taxes, suppression of labor wages will continue to trend the same way," they wrote. "Any of those trends continuing to the point we have multiple companies... having wealth bigger than many countries combined, could result in the kind of social unrest preventing that growth." Still, others offered a middle-ground take: yes, inflation will play a big role, and yes, some technological innovations might drive value, but don't expect a repeat of the past 30 years. "Past performance does not indicate future results," one person pointed to advancements in AI, renewable energy, automation and healthcare as areas that could push corporate profits higher, even with slower consumer growth. "Humans are a dynamic, innovative species," one commenter said. "We may well find the world unrecognizable in 30 years." Others focused on the U.S. dollar itself. "If you divide the S&P 500 over the money supply, you get almost a constant," they argued. "It has never been true growth... just almost keeping purchasing power." So, is the idea of a $900 trillion S&P 500 absurd? Depends on who you ask. But most Redditors agreed on one thing: inflation will do a lot of the heavy lifting, and whether it's real growth or just more dollars chasing assets, the index might keep climbing. Read Next: Over the last five years, the price of gold has increased by approximately 83% — Investors like Bill O'Reilly and Rudy Giuliani are using this platform to UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article A $900 Trillion S&P 500? Reddit Debates The Math Behind 10% Market Growth Rate For Another 30+ Years originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
an hour ago
- Yahoo
The U.S. debt outlook is so dire it now resembles the student loan crisis, former White House economic adviser says
Jared Bernstein, who previously served as the chair of President Joe Biden's Council of Economic Advisers, has had a change of heart when it comes to U.S. debt. After being a longtime dove, he has become a hawk 'because our nation's budget math just got a lot more dangerous.' He cited President Donald Trump's tariffs and tax cuts. The U.S. is inviting a debt shock if it continues on its current trajectory, which is starting to look like unsustainable student loans, according to Jared Bernstein, who previously served as the chair of President Joe Biden's Council of Economic Advisers. In a New York Times op-ed on Wednesday, he acknowledged that he was once a longtime dove when it came to budget deficits and previously argued that fiscal austerity often does more harm than good. 'No longer. I, like many other longtime doves, am joining the hawks, because our nation's budget math just got a lot more dangerous,' Bernstein wrote. In particular, he pointed to the math around economic growth versus debt interest. Governments can sustain budget deficits if GDP expands faster than the interest rate on their debt, Bernstein explained, citing research from economist Olivier Blanchard. That's where the student debt analogy comes in. College graduates can keep up with monthly payments as long as they haven't borrowed too much and their income is rising faster than their loan bills. 'Conversely, though, if they borrowed to the hilt—and if their student loan debt starts growing faster than their income—they can quickly get in trouble,' Bernstein said. 'And that's where our country is right now.' It's an ominous warning given that delinquency rates have soared among student loan borrowers, resulting in seized wages and credit scores plummeting. That's after the number of Americans with debt from federal student loans more than doubled from 21 million to 45 million between 2000 and 2020, according to the Brookings Institution. Meanwhile, the total amount owed more than quadrupled from $387 billion to $1.8 trillion during that time, growing faster than any other form of household debt. When it comes to the federal government's finances, America's debt costs relative to income used to be more benign. Since the early 2000s, the inflation-adjusted yield on 10-year Treasuries was below the running 10-year forecast for economic growth. But that changed recently, with the two now converging at just above 2%, due in part to government spending during the pandemic and higher inflation—which forced the Federal Reserve to hike interest rates aggressively, dragging yields higher. 'That's a potential game changer for debt sustainability,' Bernstein said. He didn't mention that the Biden administration added trillions to the debt with expansive spending that also stoked inflation. Instead, he pointed to President Donald Trump's economic policies, namely his trade war and the tax-and-spending bill that he signed into law last week. High tariff rates will lower economic growth while boosting inflation and interest rates. At the same time, tax cuts will increase debt and likely to raise the interest costs for servicing it, he added. To help avoid a debt shock that forces the government to precipitously slash spending or raise taxes, Bernstein suggested Congress pre-determine 'break-glass moments' and binding fiscal responses. The U.S. already pays more in interest on its debt than it spends on Medicare and defense. Those interest payments will hit $1 trillion next year, trailing only Social Security as the government's biggest outlay, according to the Committee for a Responsible Federal Budget, a think tank. Meanwhile, Trump's tax cuts and spending are expected to add trillions to the deficit in the coming years, with the total debt-to-GDP ratio surpassing the post-Word War II record soon. 'But that path remains unsustainable: The primary deficit is much larger than usual in a strong economy, the debt-to-GDP ratio is approaching the postwar high, and much higher real interest rates have put the debt and interest expense as a share of GDP on much steeper trajectories than appeared likely last cycle,' Goldman Sachs said in a note last month. This story was originally featured on Sign in to access your portfolio
Entrepreneur
an hour ago
- Entrepreneur
Why This Market Dip Is Your Chance to Accelerate Product Velocity, Win Customers and Own the Next Cycle
When markets go quiet and headlines fade, the founders who keep building, shipping, and listening are the ones who will be ready when the next bull run erupts without warning. Opinions expressed by Entrepreneur contributors are their own. Crypto volumes have plunged from a post-Trump election surge of $126 billion to a mere $35 billion. Tech stocks remain sluggish compared to their former highs, even as the dollar hits a decade low. Venture capital feels like it's collectively holding its breath, with top Silicon Valley firms pivoting their business models. This isn't a collapse — far from it. It's a rare, fragile pause. A "wait and see" moment of equilibrium that, like all market pauses, likely won't last. Behind the headlines, a far bigger story is unfolding. The United States and China have quietly reopened high-level trade talks aimed at easing the tensions that have defined the past five years of decoupling and protectionism. According to Bloomberg, these negotiations are among the most serious since Trump-era tariffs began reshaping global supply chains. At the same time, China is reportedly loosening capital controls and courting global investors again, which suggests Beijing views the current economic stall as too risky to endure. If these talks produce breakthroughs — whether tariff rollbacks, a tech export détente or coordinated policy resets — investors can expect a market reaction not seen since early 2021. In short, this stillness may be the calm before the next global bull run. When capital floods back into high-growth sectors, it will do so suddenly and violently. Founders should see this moment for what it is: a gift. The quiet between cycles is the rarest and most valuable time to build. Attention is cheap. Competition is minimal. Customers are more accessible. And though investors seem quiet, they're watching closely for the teams that stayed focused while others lost steam. Related: Today's Biggest Companies Are Acting Like VCs. Here's Why Startup Founders Need to Pay Attention. For startup founders, the single most important mandate now is to increase velocity. This doesn't mean grinding longer hours or chasing a vague idea of "hustle." It means removing friction from your product cycle and delivering tangible features or updates to users every week. If your roadmap is quarterly, break it down into weekly shippable blocks. Tools like Linear and Notion help teams stay aligned without heavy process overhead. For UI or user-facing experiments, Figma remains one of the fastest ways to move from idea to prototype without slowing development. Founders must get hands-on with their products and focus on delivering value to power users. Equally critical is user proximity. It's easy to skip customer conversations when fundraising is tough and feature velocity slows, but that's exactly when listening matters most. Even five brief conversations can reshape your roadmap. Ask simple questions: What frustrates power users right now? What features did they stop using, and why? This feedback doesn't live in dashboards or pitch decks — it lives in the space between what users say and what they wish existed. Another key use of this pause is building owned distribution. Paid channels are overpriced during market stagnation, and unless you've raised a mega-round, you can't outbid incumbents. Instead, focus on organic reach and audience trust. Use content marketing tools like Substack or Beehiiv to grow an email list that's immune to algorithm shifts. Invest time in SEO and keyword ranking. Record short product explainers or vision videos with Loom or Descript — not to "go viral," but to humanize your build process and deepen audience trust through transparency. When markets heat up, people will remember the builders who kept showing up in the quiet— and say, "I've got the alpha on a hot project that's about to pop." Macro signals are aligning. Long-term bond yields are starting to wobble, suggesting markets expect increased government stimulus or monetary easing. Chinese capital markets are showing signs of foreign inflows again, especially in ETF activity across Hong Kong and Singapore. Central bank rhetoric is shifting — from "containment" to "cooperation." Once that shift becomes public and coordinated, markets will snap back, starting with high-risk, high-reward sectors like crypto, AI infrastructure, e-commerce and frontier B2B tooling. Here's the truth most won't say: you won't have time to prepare when that happens. The winners of the next cycle won't be those who waited patiently for conditions to improve. They'll be the founders who treated this silence like a sprint, not an intermission. Then boom! Silicon Valley's legendary VC, Tim Draper, wrote a social media post saying, "Slack transforms communication, Microsoft responds with Teams. Tesla enters the market, and suddenly every automaker rediscovers innovation. Progress happens in bursts of energy." Related: 6 Hidden Costs of Scaling Your Business Too Quickly Being first to market matters. That means launching scrappy MVPs before they're perfect. Writing landing pages before the product is done. Building waitlists and generating buzz, even if customer acquisition costs aren't optimized. This isn't the time for polish; it's the time for presence. Investors remember who shipped, who listened and who made noise without needing a bull market to do it for them. This moment in the cycle doesn't feel urgent, but it is. The silence is a setup. The only founders who survive the surge will be those building now, shipping weekly, while the world isn't watching. Ship faster. Build deeper. Talk to your loyal users. Grow your content channels. Engage. Because when capital returns, it won't send a save-the-date. It will kick the door down. And everything you've built in this quiet stretch will either stand or be swept away when the big players come in.
