DAVID SHAPIRO: Big headlines can have an even bigger effect
AI has been a 'good story' whose end is nowhere near in sight
My job obliges me to keep in close touch with what’s happening in the world. It requires a large amount of reading: newspapers, magazines, analyst reports, blogs and so forth. Delving into the world of finance and economics is hardly page-turning stuff and its complexity demands dedication and discipline. Yet, I am the first to admit that I am easily distracted, and often find myself browsing the sports pages or following those links that feature scandalous stories about my boyhood heroes.
Still, I plod away and remain big on analysing headlines. Those big bold letters and accompanying articles have a major influence on market sentiment. When the bulk of comment is bleak, you can bet equity prices will turn negative. But when those despairing stories no longer have any sway on trading levels, you can safely assume that the bottom of a market has been reached. It will only take one or two positive remarks to swing the trend in the opposite direction. Naturally the same applies...
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