The stock market's rallying while the economy's tanking — it all makes perfect sense
Provided by Dow Jones
May 3, 2020 2:59 PM GMT+1
By Cullen Roche
What's key to understand: Investors are always gauging the future prospects of the business world
The stock market in April had its best month since 1987. And the economy had one of its worst months ever.
How is that possible? Is it a conspiracy by the Federal Reserve? Are stock traders insane? Both, perhaps?
So what do we make of all this? Let's talk about it.
First, the stock market is forward-looking. So while we see everything for what it is, the stock market is looking for what it might become. This ebbs and flows across time. The market's fluctuations are a series of guesses about future outcomes. Warren Buffett always describes this as "Mr. Market," a man (yes, a man) who is bipolar, constantly screaming out his opinions in a manic way. Sometimes right, sometimes wrong, but never in doubt.
Source :https://www.morningstar.com/news/ma...e-economys-tanking-it-all-makes-perfect-sense
Provided by Dow Jones
May 3, 2020 2:59 PM GMT+1
By Cullen Roche
What's key to understand: Investors are always gauging the future prospects of the business world
The stock market in April had its best month since 1987. And the economy had one of its worst months ever.
How is that possible? Is it a conspiracy by the Federal Reserve? Are stock traders insane? Both, perhaps?
So what do we make of all this? Let's talk about it.
First, the stock market is forward-looking. So while we see everything for what it is, the stock market is looking for what it might become. This ebbs and flows across time. The market's fluctuations are a series of guesses about future outcomes. Warren Buffett always describes this as "Mr. Market," a man (yes, a man) who is bipolar, constantly screaming out his opinions in a manic way. Sometimes right, sometimes wrong, but never in doubt.
Source :https://www.morningstar.com/news/ma...e-economys-tanking-it-all-makes-perfect-sense
