Earnings Disappointments Trump Limited Economic Data
Investors had plenty of time to worry about corporate earnings, including a string of earnings misses, and renewed concerns about Spain this week.
U.S. economic news this week was next to nonexistent, so investors had plenty of time to worry about corporate earnings, including a string of earnings misses, and renewed concerns about Spain. Reduced worldwide growth forecasts from the IMF didn't help matters, either.
Then the U.S. Bureau of Labor Statistics reported initial unemployment claims dropped an unbelievably large 30,000 people in just one week. Unfortunately, it was just that: unbelievable. It turns out that a statistical quirk means that the decline will produce an equally large reaction in the other direction next week. While this glitch and last week's huge fall in the unemployment rate have many complaining of a pre-election conspiracy, readers know that I have been griping about of the accuracy of the employment data for well over a year.
Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.