Global financial crisis It’s all about perception, innit? There has been a discernable mood change in markets over the past week, especially regarding economic data. In the early stages of this rally, the slew of nasty releases was ignored and the odd green shoot was jumped upon as a signal to buy. Now the opposite is happening. Improving numbers outweigh the worsening ones, but the shockers are influencing investors more.
There are two explanations. Either investors think the level of the market is stretched versus their expectations for the economy or the latest data is changing their view of the economy relative to valuations. Both are possible at the same time, of course, and that would be bearish indeed.
