Overnight equity markets were unremarkable, while debt markets around the world continue to rally while they follow our Treasuries higher, as whatever weakness was inspired by the fear of Fed tapering comes back out of the market. Meanwhile, the early going here saw the Dow and S&P slightly higher, with the Nasdaq gaining about 0.5%. From there the market sold off and finished with a small loss (the Nasdaq was flat).
Away from stocks, green paper was flattish, as noted bonds were higher, with 10-year yields closing around 2.65%, oil was a nonevent, and the metals were flat.
All the Noise That's Fit to Print
Turning to the topic of sloppy journalism, I have seen a fair amount over the course of my career, though it does seem like it is more common in the recent past, and today saw two examples juxtaposed in the Wall Street Journal that I had to comment on. First, an article headlined, "Copper Sinks Amid Fed Worries, Mixed China Data," began: "Copper slipped Monday on worries about an easing of Federal Reserve stimulus."
Now I don't know exactly why copper declined yesterday, but I guarantee one thing: it did not sink in price because anyone involved in that market actually thinks that the Fed might be about to taper. Bernanke was unequivocal in his statements, and despite the headlines made by Bullard's tortured (i.e., misinterpreted) remarks that the Fed could spring a surprise taper in October, no one with an IQ over a shoe size could actually believe that. It seems now whenever a market declines, lazy (or incompetent) journalists write that it was because of renewed taper fears, when in reality the reason markets move is usually either noise or unknowable, though sometimes it is quite obvious.
They Can't Both Be Right
As if to help me make the point how careless journalists can be, right above the aforementioned article was the following: "Taper Delay Boosts British Equities." While that might actually have been true, since it is plausible that stock speculators would be relieved by the fact that the Fed didn't taper, and are piling into speculative ideas with some vigor now that the Fed is "out of the way," wouldn't you think that somebody at the Wall Street Journal would have recognized that those two articles don't really belong next to each other? However, both of them do show that how the Fed's seat-of-the-pants guesswork and reliance on the jawbone standard to modulate psychology about its money printing has subjected all markets to some form of headline roulette nearly every day.
