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Investing Specialists

Market Feels Giddy, I'm Getting Queasy

The market pivots higher on economic headlines, but the fine print is more worrisome.

From a mid-August high to an Aug. 30 low, the S&P 500 fell 7%, convinced that we were about to enter a double-dip recession based on just a month's worth of poor-looking economic data. This week's video highlights why the market seems so focused on economic data lately and why stocks are tending to move together as a group rather than on individual fundamentals.

Better--but still not great--economic news in September helped the market gain back its previous losses. The market moved up almost 9% from late August until the end of September. In fact, the Dow Jones Industrial Average had its best September since 1939!

It certainly didn't hurt that the Federal Reserve intimated that they were willing to drive long-term rates lower, if the economy were to falter again. I think some market participants missed the "if" part of those statements and blithely assumed rates were going lower and fast.