Skip to Content
Investing Specialists

While Markets Yo-Yo, Economic Fundamentals Improve

Economic metrics continued to be positive amid this week's see-saw market action.

Mentioned: , ,

U.S. markets were spinning on yet another yo-yo this week, swinging down early in the week with news out of Cyprus (irrelevant, in my opinion) followed by a rally on Wednesday on a statement from the Fed that it was not going to tighten anytime soon after all. Then on Thursday, dismal economic news from Europe, especially in the manufacturing sector, sent investors scurrying for the exits again. Negative earnings news and forecasts out of FedEx (FDX) and Oracle (ORCL) didn't help matters either, although those weaknesses had more to do with secular trends than economic softness.

None of these headlines was particularly new or insightful. Europe's been weak forever, the Cyprus issue was well known and not a big deal, and the Fed report said nothing really groundbreaking. Nevertheless, large market swings occurred within minutes of these "news events."

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.