By , September 2, 2014
We are seeing another example today of “good news” for the economy equals “bad news” for the market. U.S. manufacturing hit a 3 1/2 year high in August and construction spending rebounded strongly in July; yet, the the U.S. market has been weak all day today.
As a follow up to my former post, this is another example of how a larger theme overshadows what would be thought of as an intuitive move in the markets. Instead of the stronger economic data today pushing markets to rise, markets are selling off as such data is starting to become expected by investors and further supports the idea that the Fed might raise interest rates sooner than the market anticipates (mid-year 2015) on the basis of stronger economic.
Other posts from
April 24, 2017
April 24, 2017
The start of the year saw a continuation of positive returns in the first quarter as global markets speculated on a spark in world growth initiated by the election of Donald Trump in the United States. Trump’s unique background and style suggested that the new president would be able repair some of the historically wide rift that has separated Republicans and Democrats.
January 12, 2017
During the first quarter, U.S. equities continued the strong advance experienced during the fourth quarter of 2016.
For the three months ending March 31st, the Dow Jones Industrial Average posted a 4.6% gain while the S&P 500 Index rose 5.5%. The stock market has been resilient due to robust corporate earnings as well as employment growth and positive economic data which have undergirded this upward advance.
Equity markets finished 2016 on a high note as markets rallied on a shocking surprise in the U.S. election. The election of Donald Trump for President of the United States was the most recent example of “low probability” events actually occurring and disrupting markets. This happened a few times in 2016, but none so dramatic as the Trump victory.