The stock market and the working stiff rarely are on the same page and today’s nearly
600 700-point decline in the Dow, capping its worst week in two years, comes partly because workers finally — finally — started getting a piece of the pie.
Investors hate that.
There’s just too much good news to keep them happy, a testament to the fact that the stock market is not the economy.
The U.S. economy added 200,000 jobs in January, according to the Bureau of Labor Statistics. Economists predicted 180,000. That’s good. Except for the stock market.
Wages, which we’ve been told for nearly 10 years would eventually have to start rising, actually went up 2.9 percent on an annualized basis. Good news? Maybe if you work for a living. That’s the biggest spike in earnings since 2009.
“I think the market is now thinking of the possibility that the Fed could raise rates four times this year rather than three,” James Ragan, director of individual investor group research at D.A. Davidson, tells CNBC.
In any event, it doesn’t make much sense to try to make sense of Wall Street so long as it appears that good is bad and bad is good.
Not that people won’t try, of course, even if the economy is too complex to make simple political proclamations.
Besides, in the big scheme of things, the market hasn’t moved that much. The Dow is back to where it was on January 10th.
Marketplace’s Kai Ryssdal tried to temper our enthusiasm when the administration was claiming exclusive credit for the bull market a year ago when the Dow passed 20,000.
So Ryssdal could be forgiven today when he said, “I told you so.”
Oh look. Markets go down, too. Huh.
— Kai Ryssdal (@kairyssdal) February 2, 2018