How Do You Solve a Problem Like the Market?

 

It’s pretty hard to figure out what makes the market tick these days.

Is it the economy? On days investors get good news on that front, stocks take off. Last week’s jobs report, for instance, pointed the way to good growth and low inflation—not too hot and not too cold.

Or is it politics? When tweetstorms erupt from the official residence of the White House, people listen and markets move.

When President Trump launched a Twitter attack on Amazon a couple of weeks ago, the stock tanked. When he announced he would slap big tariffs on China, markets sold off. And this week, when he threatened to unleash missiles on Syria in retaliation for President Bashir al-Assad’s latest chemical attack on his own people, oil prices rallied and stocks tumbled.

But then, China’s President Xi Jinping made what were construed as conciliatory remarks on trade (but was really a rehash of previously stated positions) and both Russia and the U.S. backed off talk of military action in Syria. In both cases, stocks rallied.

So, how can you tell what’s really moving markets?

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