Is good economics news good or bad for equities? In the US, economic data poses something of a conundrum to investors. Should we cheer on strong economics news because it means the economy is getting stronger? Or do we prefer to see the Fed continue providing monetary stimulus as much as possible? Without a doubt, asset prices have gotten a nice boost from the Fed's unconventional monetary programs. The thing is, the Fed can't keep providing stimulus forever. At some point, the Fed's generous money flow will result in more spending than savings - and that's when inflation can rear its head. Besides, don't we want to see the economy grow and strengthen? Ultimately, it will be better for everyone for the economy to prosper. Nevertheless, for the time being, it's hard to know when good news is actually good.
I'm an investments analyst for a US-based independent investment research firm. My focus is on economics, options, and all types of stocks, but especially tech, Internet, and renewable energy companies. I have experience as a options market...
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