“What’s next for stocks?” — is this for real?
November 06th, 2006 - 7 Comments
Notice the quotes around the title of this post, because I would never, ever write that myself.
From yesterday’s CNN Money article, “What’s next for stocks,” let me try to shed some light on how these “insights” are conceived:
First, make confusing claim with no clear answer, using qualifying words like “seem”:
So where is the market headed next? Not only have recent reports painted a mixed picture of the economy, shaking investor confidence a bit, but after more than three months of gains, stocks seem vulnerable to a bit of a retreat.
Insert obligatory quote from someone saying something:
“After the strong rally we’ve had, the market was due for a rest,” said Ken Tower, chief market strategist at CyberTrader.
Qualify what was written two paragraphs earlier by now predicting the exact opposite:
While more declines could come next week, in the longer term, stocks have a good shot at resuming the upward trend, Tower said.
Add another quote that doesn’t mean anything. This time use the qualifying phrases “should,” “at least,” and “modest”:
“Companies are buying back a lot of stock right now, while at the same time, individual investors continue to come back into the market,” said Jeff Kleintop, chief investment strategist at PNC Wealth Management. “That should create at least a modest updraft for stocks through the end of the year.”
Write a lot of numbers:
All that helped fuel one of the best third quarters on Wall Street in years, and a surprisingly strong October. The Dow hit record closing highs 13 times last month, while the Nasdaq composite and S&P 500 closed at their best levels in more than 5-1/2 years.
Finally, talk about confusing stuff that distracts you from the fact that this article is a meandering mess:
But recent reports have pointed to a slowing economy, including the weakest economic growth in more than three years in the third quarter, as well slowing activity in manufacturing and housing, and no growth in productivity.
Those reports sparked some selling, but also bets that if the economy is slowing so much – and inflation continues to moderate – the Fed can start cutting rates as early as the first quarter of next year.
In the early part of next week, Wall Streeters will be focused on Tuesday’s mid-term congressional elections.
Hope that helps. The full article is here, but don’t bother.
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