Wall Street in Reactionary Mode
During these jumpy times, Wall Street has been reacting to news on a very literal level - if it's bad, sell. The Wall Street I know fit the adage "buy on rumor, sell on news"... investors had already factored in what they knew was coming, and often executed contrarian strategies at press release - usually selling on good news in order to lock in profits.
Today the global markets are off because U.S. employment stats took a nosedive in August. But that's what a credit crunch month will do... investors already knew August was a tough month for anyone related to real estate and banking.
On September 5, stocks crashed on the NAR news about home sales in July plunging by 12% to the lowest level in six years.
All this "news" seems self evident.. and a couple of bloggers noted this...
Conclusion: to quote financial pundit David Fry
Like I was saying, “when subprime/credit/mortgage/housing issues are quiet, stocks rally.” Those negative issues came back to the forefront and stocks fell sharply on somewhat higher volume.
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