Why Did the Stock Market Drop After Lasts Weeks Unemployment Report?
The stock market dropped after last week’s unemployment report for one reason, and one reason only. That reason is short-term investors. We’re not talking about the proverbial day traders here, but ordinary people with ordinary fears and concerns who are not able to distance themselves emotionally far enough from their money to do serious investing. We’re talking about most people. We’re not just talking about unemployment reports. We’re talking about any economic “news”, such as housing starts, manufacturing orders, foreclosures, mortgage rates, trade deficits, and a few dozen other factors which can be interpreted to mean different things by different people. Primarily though, we’re comparing what actually happens with what “experts” forecast. Even though we’ve seen a marked decrease in the number of new jobless claims, the unemployment numbers last week were a tiny bit higher than what was forecast. This is not unlike the famous, or infamous, “guidance” which many companies offer as
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