So, let's see: Congress can't agree about raising the debt ceiling, unemployment is stubbornly high, housing seems to remain mired in a slump, car sales are slowing, Greece needs another bailout, and tornadoes have wrought havoc down south. Nothing but bad news. (Unless you're Lady Gaga, who just sold over a million copies of her new album)
And in what seems like a natural response to such bad news, the Lemmings of Wall Street are once again on a selling binge, sending the DJIA down hundreds of points. Now I have to ask myself, is this most recent spate of bad news (read: typical news) better or worse that what we had just a few months ago: earthquake and tsunami in Japan, followed by a nuclear meltdown worse than Chernobyl, accompanied by I-can't-even-remember. My point? The market slid about 6% on all that bad news, then recovered. Just like it did in August-September 2010. Just like it has so many times.
Markets don't move in straight lines: neither do economic recoveries (or recessions, for that matter). But selloffs recover when corporate earnings are moving in the right direction. When all is said and done, and yesterday's newspaper is in the recycling bin, earnings are what matter.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).