Not many know of Slovakia and fewer understand how close this tiny nation of 5 million people came to derailing the efforts of European policy makers to contain the debt crisis engulfing the continent and stifling markets around the globe. After first voting not to participate in expanding the EFSF (European Financial Stability Fund), Slovakia has turned around its vote and is now participating. The reason its vote is important is that the 17-nation Eurozone needs a unanimous vote to secure expansion of the EFSF and Slovakia was the 17th “yes” vote. Now, this important phase of the overall solution to the European debt crisis can move forward. One would think this news would move the market in a positive direction, but it did not.
Aside from profit taking, which is expected after such a strong move to the upside for the market, the market seems little interested in making any big move at the moment. Volume has been light and conviction is, well, muted, if that is the right word. So much bad news has been baked into the market cake that it has little appetite for much risk. The bear has gone to sleep in its cave and the bull is quietly staring over the fence at the green grass on the other side.
This will change if any meaningful headline emerges about Europe, certainly, but the other dark cloud overhanging the market is the global economy. Although less dark than it was a month ago, the cloud of economic uncertainty remains. It will take more than today’s economic data to ignite a rally.
New claims for jobless benefits were little changed last week and the trade deficit narrowed marginally in August, indicating a modest improvement in the economy.
Not much inspiration in that news, although the fact that it is “not bad” is helpful. It keeps the bear sleeping and the bull watching for a way to the green grass. Perhaps, the market will find some inspiration in the earnings reports beginning to emerge. So far, Alcoa and JP Morgan made little impression and the preview reports about Google seem good but lackluster. Keep in mind, the “season” is still young and many more companies will report. Yawn … I’m sorry, what was I saying? Oh, yeh, I had another thought …
Members of the media, myself included, are … concerned only with getting a click or a ratings-friendly sound bite, regardless of human expense.
I came across the above excerpt this morning in my usual perusal of news across the board. I decided to pass it on to you because it is a rare moment of clarity about the reality of the news media today – it is ratings driven. This is why I have said so many times that making your bets on what you hear in the news is not the best way to work your money. Understanding the facts underneath the news and being able to frame the facts in a meaningful context is a much better way to deal with the market. So say I …
What a sleepy day. Although I am not a bear, I feel like I want to join them in the cave for a nap.
Trade in the day – Invest in your life …
