This morning, the economic news was dreadful enough that stocks ROSE sharply. I know that makes no sense, but Wall St is a true believer at the altar of central bankers.
So why would Wall St BUY on bad news? Because they have become so addicted to endless monetary stimulus that they see all economic bad news as a good reason to buy stocks.
Unfortunately, however, one of the Fed governors this morning threw cold water on Wall St's expectations of an UN-taper. John Williams, who is one of the Fed's biggest fan of money printing, said that even a poor jobs report like the recent one won't stop the Fed from tapering off it's debt monetization scheme. Ironically, he predicted STRONG economic growth this year.
Stocks FELL on the news, dropping into negative territory. What a warped market that BUYS on bad news, and then SELLS on a bullish forecast!
headline:
WILLIAMS SAYS ‘RECENT DATA HAS BEEN SOMEWHAT DISAPPOINTING’
but...
FED’S WILLIAMS: ‘HURDLE IS PRETTY HIGH’ FOR CHANGING TAPER PACE
FED’S WILLIAMS SAYS NOW IS TIME TO FOR PULLING BACK QE
The red line (top left) was yesterday's close. Stocks rose sharply for the hour following the weak real estate data, then plunged when Williams began his speech.
What a twisted market that does just the OPPOSITE of what would be expected. Bad news brings a RISE, while good prospects sends stocks into "sell" mode.
But this is the culture in the financial markets that central bankers have created!
