From the initial looks of things, the markets are opening lower after President Obama’s speech. You can probably already hear your anti-Obama colleagues declaring things like “the market has no faith in the president, see it’s dropped.”
And they couldn’t be more incorrect.
Yesterday, the indexes took a 4% bounce – a short respite from the prior week’s negativity. Today we are simply seeing some profit taking, plain and simple. If you’re a mutual fund or professional money manager, you are going to want to take your profits when they come, and stay as liquid as possible.
As of this writing the S&P 500 (.INX) is down over 2%. It also tells us that our two-week-long slid isn’t over. Just punctuated by some marginally positive days.
There are many on the far right and far left that believe in conspiracies of stock market control. But the fact of the matter is that it’s not that simple. In order to change the movement of the market, you really need to affect the mass psychology of the participants – the millions upon millions of people both in the United States and around the world.
A speech rarely does that. And if it does, like cases with Federal Reserve Chairmen, the effects don’t last long. In our current market rout, it’s best to blame the macro-economy instead of blaming it on a handful of people.
Because if a handful of people could change the market, those individuals would be running it straight up. Neither Obama, nor anyone else has that kind of power. Not even Warren Buffet seems to be able to sway Wall Street.
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