This just in… today’s earthquake in Mineral, VA that prompted the evacuation of several buildings in Washington caused the stock market to soar. Stocks edged a full 1.23% higher before closing for the day after the temblor* hit the East Coast. In other news, butter production in Bangladesh was up 0.615% on August 23, 2010.
And that’s why financial reporting is completely ridiculous… All the financial reporting that talks about stock market movements should come with a required phrase – “We think that the stock market…”. It’s amusing how we try to peg exactly what caused the market movements and why. The truth is these are only guesses.
But seriously, the stock market really did go up after everyone in Washington had to leave their offices. Coincidence? I think not.
* Note: I picked this up from NPR. Gotta love thesauri…
Ha! Good one. I do agree with you though…that ‘expert opinion’ on the stock market tends to amount to speculation at best. What it [the bump] probably means is that the computer trading algorithms do better when the humans aren’t around to interfere.
That’s very possible, Josh! I didn’t hear if Wall Street was evacuated as well.
I just hope people realize the ridiculousness of the financial media and how they are focused on trying to predict and guess at everything. Most of the time they’re way off, but there’s so much reporting going on that there’s little accountability as to what was said/predicted. It really is almost best to completely ignore it all.
Hi Paul–I had a brilliant professor for an international finance course I took in my senior year at a college (yes, I was a finance major). He addressed this notion of conventional explanations for stock market movements and said what you did, that the given reasons are pure conjecture. The only time there’s a connection is when something major happens.
I don’t know if a 5.something tremblor qualifies as a noteworthy “something”, but there is a possiblility that stocks rose on the prospect that wanton destruction would cause a surge in business orders and new construction. Wall Street doesn’t interpret news that way real people do. Bad news is often good news on Wall Street. It’s a stretch, but that’s my conjecture!
Hey, Kevin! Good to hear from you.
I actually was thinking the same thing while I was writing this, but my primary point was to poke fun at all the ridiculous claims as to why the stock market did this or that. Financial media acts as if there’s a list of corresponding reasons next to the stock transactions on the ticker tape. It’s quite funny to watch the broad market news headlines on something like Yahoo! Finance and see how the reasons change so drastically throughout the day.
Yeah, they’re just connecting the dots. Stocks moved this way + major news story = explanation for why stocks moved the way they did. It’s so arbitrary it should be ignored!
Personally, I think stocks move in waves. If a market is rising over the longer term, or if it’s crashing, it will continue on the same path until the cycle is played out. There may be interruptions along the way but they’re only temporary. It’s catching that wave at the right time that makes all the difference.
I didn’t know much of the stock market. But I still think that it is amusing that earthquake could cause the stock market to soar. 1.23% higher before closing for the day after the temblor hit the East Coast is not a coincidence. I wonder if tsunami or other tropical storm could influence the stock market just like the earthquake. Thanks for sharing the interesting article.
I meant this as a joke, Stephan. My main point is that the financial media tries to make such connections when they often do not exist. That’s part of the reason why it’s ridiculous to pay too much attention to the financial “news”.
Oh the media can link everything to anything. It always has ready to publish interesting stories. Stock markets are marked by a number of fluctuations. It is never stable and it would be inappropriate to link the ups and downs of the market with any particular event.
You’re exactly right, Rosalia. Thanks for commenting!
Knowing that makes me really doubtful. The people that had left Washington must had felt embarrass after the release of these data.
In my case i really don’t know what is happening in the stock market. I heard in the news about rising the price in the stock market due to crisis and others. I will agree with you Paul about the effect of earthquake. This is really happening due to earthquake, those affected area will be in trouble and chain reaction from local market going to the stock market.
You are right Paul! I worked in one astrology company which used to make stock predictions. The astrologers used to support their predictions or say, link them with any event, whether related or unrelated, to the fluctuations in the market. I used to laugh at them but still I had to edit the content
Exactly, Leo! You can try to make a prediction sound correct by linking it with things that appear to connect even if they don’t. Most financial new reports are no better than the horoscopes section of the newspaper!
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