Often you hear in the news: Stocks went up/down today because of this and this and fears of that. It really moved the market? Where they got such info? Some surveys? Interviews with money managers? Or news presentators just saw which direction the market moved, and looked for positive/negative things accordingly? Most times the "reasons" stated were known days ago, and didn't moved the market.
In a nutshell, people's emotions end up 'moving' the market. In theory, it's not the news itself, but the reaction and interpretation of that news is what moves the market. Keep in mind there are 'little' econ announcements that your mainstream news does not mention. For example, this morning business inventories were released at 10am and not much happened. Other times, the market 'moves' around the same time this news is announced. Is the market moving based purely on econ / news announcements? Perhaps. Or maybe it's a coincidence. Regardless, as long as the market is moving people are making money and people are losing money.
No. News desks will have both scenarios prepared in advance. Reasons help sell advertising, that's all. So the viewer ultimately pays to hear reasons that make them think someone knows what is going on so they are more likely to be in a receptive state to be influenced by the adverts. Turn off your TV and think for yourself. Leave reasons to the historians.
Your question re does news move the market is covered in a chapter in the book Irrational Exuberence. A must read, imo.
Yes...news and reasons do move the market (trend reversal, stronger trend continuation or unusual price activity in a very small range). I'm a futures trader and have been trading +15 years and the following do move the markets (quick volatility spike or a parabolic price movement): * Key Economic Reports * Key Market Events (FED or ECB announcements, speeches, Quadruple witching week et cetera). * Geopolitical Events * Breaking World News * Price Action of other Key Markets (intermarket analysis) All of the above are easily seen occurring in realtime when the news hits the market especially if its being hyped prior to the news event (except for breaking world news). Anybody that can't see it either is not watching a realtime chart or hearing about it in the newspaper the next day. Simply, no surveys needed...you can see it happening if you have realtime charts. Once again, my above commentary is in reference to trading Futures and not stocks. Knowing when price will make those big moves is a lot easier than knowing which direction. P.S. I'm not talking about the TV nor the newspaper. Mark
All eyes were elsewhere on a particular FED speech when that 10am est Business Inventories report was released. As soon as the FED speech had concluded or the key speaker had stopped talking... The market made its move (1055am - 1105am est). Index futures, Oil futures and Gold futures all southward on increasing volatility...flight to quality in Treasury Futures on increasing volatility. There's also a trend day tendency involving Quadruple Witching week. All the above is a repeatable event and has a high probability of occuring the next time the dots line up sort'uv speak. Mark