Good Copy, Bad Copy

Copy for the sake of it. I’m not a fan.

Noteworthy market news was sparse Thursday, to put it politely. A less polite account of another session adrift between holidays might find someone like myself asking what the point is. If everyone who’s anyone is determined to take this week off, then why bother opening markets at all? It’s almost as if we think capitalism demands it.

Financial media outlets, mainstream and otherwise, are compelled to “explain” the price action even during weeks when the signal to noise ratio is hopelessly skewed in favor of noise.

Signs of labor market weakness take pressure off Fed

The explanation for Thursday’s rebound on Wall Street was something about Goldilocks jobless claims data in the US — initial claims stayed low last week, and continuing claims were higher than expected the prior week, suggesting the labor market is resilient but weakening around the edges, just what the Fed wants to see. Or something.

It’s wholly implausible to argue that was the rationale for a rousing rally in equities, but absent better ideas (and missing key staff to the same vacations — but certainly not the same vacation spots — Wall Street is enjoying), media outlets cited the claims figures both for higher stocks and lower long-end yields. Two-front relief, if you like, predicated on the idea that as long as continuing claims are rising, monetary policy is on track to cool the labor market and thereby inflation.

In reality, Thursday’s price action was just a product of illiquidity and other year-end dynamics, as discussed briefly here on Wednesday afternoon. “The good news, assuming you’re the silver lining type, is that just as thin markets and poor liquidity can amplify downside, effectively transforming a mild holiday hangover into a notable downdraft, so too can the post-Christmas vacuum (with a little help from erratic vacuum tubes) be fertile ground for a rally during 2022’s final trading sessions,” I wrote, before suggesting nobody should count on that, though.

One piece of actually constructive news (or, more precisely, non-news) was the absence of any adverse headlines out of Italy, or other locales where Chinese travelers are arriving fresh from three years of lockdowns at home. The risk-off mood on Tuesday and Wednesday was blamed (semi-plausibly) on the risk of new virus variants emerging in infected Chinese now flying around the world. Italy on Thursday offered solace a day after mandating tests for all arrivals from China.

“This is quite reassuring,” Giorgia Meloni told the world, noting that after sequencing half the samples from passengers who arrived in Milan this week, all were the omicron strain. “The situation in Italy is under control,” she added. “There are no immediate concerns.”

Unfortunately for media outlets, good news makes for bad copy.


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3 thoughts on “Good Copy, Bad Copy

  1. Having toiled on the city desk of a large southern city daily for the first ten years of my post college life, it was both amusing and appalling the stuff we filled copy holes with during slow news days. My publisher — scarily physically and temperamentally reminiscent of Spiderman’s editor J Jonah Jameson — used to say the subscribers paid for a year’s worth of news and dammit, we would provide a year’s worth! Be thankful for the slow days. There will be plenty of days you wish for less news.

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