Press Clairvoyants: Opening Rise Means Markets Want Stimulus Passed
Have you ever wondered how the geniuses who report business news know why the stock market opens or closes up or down on any given day -- especially when they venture into political explanations?
I received this e-mail from CNN just after the markets opened:
Gosh, those e-mail drafters at CNN are smart. Who knew that the markets want the stimulus package so bad?
Can't you hear, senators? The markets want their stimulus and they want it now!
Give me a break. There is no hard evidence of CNN's assertion. Others commenting on the opening, including CNN itself, aren't buying all of what the e-mail was selling. Here's what CNNMoney.com had to say at 9:42 a.m.:
Financial stocks rallied Friday morning, pushing the broader market higher as investors accepted massive January job losses, and tried to look ahead to the government's stimulus plan and new version of the bank bailout.
That's in the neighborhood, but still far from "rais(ing) hopes that stimulus will pass quickly."
But RTT News doesn't even mention the stimulus at all in its commentary on the first half-hour of trading:
Major Averages Posting Strong Gains In Early trading
(RTTNews) - After seeing some initial strength, stocks have continued to perform well over the course of the first half-hour of trading on Friday. The major averages have all moved firmly into positive territory, adding to the gains posted in the previous session.
With traders expressing optimism ahead of a speech from Treasury Secretary Tim Geithner on Monday, banking stocks are turning in some of the best performances. Most other sectors are also moving higher, with steel, semiconductor, and real estate stocks posting notable gains.
This didn't stop other wire services from engaging in de facto stimulus package lobbying. Although this Reuters report ahead of the opening didn't mention the stimulus package, this one shortly after the opening did. The Associated Press's Madlyn Read wrote just before the opening that "Wall Street was set for a moderately higher open Friday as investors hung their hopes on the government's stimulus plan even as they awaited another bleak jobs report."
Zheesh. It's just as likely that investors know how little real stimulus is in the bill, and have already discounted its relevance, whether it passes or fails. It may also be that the markets have had a bad few weeks recently as the reality of what Congress and President Obama are on the verge of doing to the economy has set in.
The overriding point is that the business press is pretending to know something concerning which it really has no idea. For them, that's business as usual.
Cross-posted at BizzyBlog.com.