The Positives Now Outweigh the Negatives for Stocks
It won’t take much for equities to react positively if earnings only meet expectations rather than beat them.
The outlook for stocks isn’t all doom and gloom.
Photographer: Spencer Platt/Getty Images North AmericaThe stock market had a dismal fourth quarter, resulting in the biggest down year for equities since 2008. So it is natural that all the prognosticators of doom would come out of the woodwork to project an impending recession. These forecasts garner headlines and visibility, which may be their real motives, since it doesn’t appear their objective is correctly forecasting economic or market developments.
When sentiment turns this gloomy, if bad news does not follow, a sharp rebound in stock prices can come in response to any of a sizable number of possible positive events. And right now, the list of potential positive catalysts is long, starting with the big rally on Friday in response to a better-than-expected monthly jobs report.