Welcome » Stock Exchange Blog » The bad news on growth increases the scholarship in the USA. Normal, I explain to you
It is sometimes difficult to understand the mechanisms of the stock market, especially when bad news increases. It must be remembered that the scholarship is above all psychological and that, in the case that I describe today, psychology plays an extremely important role.
Crisis and opportunity
For the first time in many years, American GDP has backed away, which is sometimes a pre-recession before. At first, the market reacted normally, with a sharp decline. But the fact that the US economy contracts can also create hope for a faster than expected rate. I remind you that consensus Investors hopes for a 1 % drop in American interest rates this year. Or We are in May, and if things happen according to investors’ expectations, a drop in rates could take place soon.
This rise in American stock market indices is therefore explained by a form of rationality reversed. The bad news increases the stock market indices because the more bad news there will be, more la Fed will be able to act quickly.
I invite you to consult le Good Morning Trading of that day.
Beautiful day of May 1 and American trading,
Benoist
