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Misleading Headlines?

  • Written by Syndicated Publisher No Comments Comments
    July 7, 2014

    Are investors not already complacent enough without the headlines slanted so extremely toward making the economic reports sound like the economy is bouncing back strongly.

    For instance, last week’s report of Pending Home Sales showed this way in the headlines and accompanying stories.

    Pending Home Sales latest evidence U.S. housing recovery is underway.

    Pending Home Sales Highest in Eight Months

    Yeah, but they remain in a 9 month trough, bounced a bit off the bottom, but remain 5.2% below a year ago. The housing industry is no longer driving the economic recovery.

    United States Pending Home Sales

    Then there was the Dallas Fed’s Business Index.

    Headlines:

    Texas Manufacturing Activity Accelerated Again.

    Dallas Fed Manufacturing Heats Up

    Dallas Index jumped in June

    Yeah, but it was hardly a blip on the chart, no big indication of a recovery from the winter slowdown.

     

    How about this headline this morning on a prominent financial website:

    “European stock markets off to solid start for second half’’

    Huh? European markets had been open for four hours into the first trading day of the second half, and it could already be determined they are off to a solid start for the second half of theyear?

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    A prominent article in prominent financial publication says, “With no recession on the horizon, there’s little need to fret about the bull market’s demise.”

    Huh? Markets have always topped out when everything looked great, (think 2000, 2007, even 1929), but had become over-valued, with investors fully invested and still excitedly buying more.

    Recessions have almost always not shown up until after markets topped out. The market topped out in March 2000. The recession took place in 2001. The market topped out in October, 2007. By hindsight the recession began in December, 2007, but wasn’t recognized until still later, Fed Chairman Bernanke saying in January, 2008, “The Federal Reserve is not currently forecasting a recession.”

    No wonder investors who look no further than the headlines remain complacent.

    To read my weekend newspaper column click here: A 2nd Quarter GDP Bounce-Back May Not Be Bullish!

    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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