Thursday, August 14, 2014

Are we back to bad news is good news?

Market has numerous crosscurrents
A retail sales report released Wednesday was the weakest since January, when bad weather was cited as the reason for anything that was disappointing on Wall Street. The Street cannot use the meteorological excuse this time. Then why did stocks rally after a weak retail report? While there is never a single reason for any move in the broad U.S. stock market, we can throw out two possibilities:
  • The softness in retail may allow the Fed to stay ultra easy short-term.
  • The market reacted to the perception of reduced risk in Ukraine and Iraq.
Bonds gave some credibility to the Fed theory above; long-term treasuries (TLT) rallied 0.65% Wednesday.

http://finance.yahoo.com/tumblr/blog-are-we-back-to-bad-news-is-good-news-211636934.html 

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