Saturday, October 6, 2012

Bad News--and Good News--Are Good for Stocks

Once again, it seems to be a time when bad is good--and good is good.  Throughout the summer, problems in Europe, economic sluggishness in the U.S., and slowing growth in China were considered by most investors to be good news because that would cause central bankers to ease monetary policy.  So the worse things got the better it would be for stocks?  Apparently so.

But now the opposite also seems to be true--that good news is good for stocks once again.  Yesterday's unemployment report was met with rising stock prices and the explanation that the report indicated that the economy was doing better and that corporate profits would improve.

After 25 years of observing financial markets, I feel like I've learned almost nothing.

Steve Lehman

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