This is Mary Walden with economist MW, welcoming you to the economic perspective. Today’s program looks at good news, bad news, expected news, and the stock market. Mike, many people try to guess the stock market, and many of them are disappointed when their guesses don’t come true. Can you give us any rules to at least understand how the stock market reacts to various kinds of news?
- Problem is the effects don’t always go the way we think
- Expect good news to lift the stock market – but, for example, if get a very good jobs report, market might fall because it expects Fed to raise rates
- Same with bad news. Recently had a disappointing jobs report. Yet market rose because thought this would increase chances of a rate cut
- Then there’s unexpected news. Market always has expectations. Say it thinks wages will rise, and so goes up
- But when report shows wages rose, but not as much as market thought, market could go down
- Enough to make head spin
- I’m MW
Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.