Who knows what moves the Dow? In the instant news environment, causes are assigned that may or may not be so. When the Dow was up earlier this morning it was supposedly because of a “stable” report on housing prices and improved consumer sentiment. When the market wobbled and fell back, it was “despite” this data.
The market is anything but rational. And considering it’s based on millions of decisions by a universe of actors with varying degrees of information, it’s often difficult to know what influences the market in real time. There are exceptions obviously, such as when the Fed acts, a big merger happens or war begins, etc. But usually, market timing is for chumps.
So today? Traders could as easily be concerned that oil prices are rising or the fallout from greater economic tension between Washington or Beijing. Or second-quarter portfolio rebalancing continues. Or not as much hot money is available as the Euro is on a better footing. The fundamentals remain iffy: high unemployment, a troubled banking sector, a Fed weighed down with toxic “assets,” a slow recovery, continued high levels of leverage. Stay tuned.
The Back Story: A different kind of corporate “personhood” was bestowed by a French court today, one where the corporate players are responsible for environmental disasters they cause. Oil giant Total and other companies saw their fines upheld and increased for causing a devastating 1999 spill off the coast of Brittany. The spill was ruled to be “directly related to lack of servicing” of the tanker.
Oh, those French…
Today’s Econ Haiku:
House prices stable
A good foundation, if true
A new boom? Sorry…