Chart du Jour: Why stocks are turning up again
Stock price movements are heavily influenced by expectations. Economic statistics and earnings beating expectations trigger higher stock prices, whereas data releases undershooting expectations result in declines.
Deutsche Bank (via Business Insider) has just published its measure of “surprises” (data beats vs. expectations). The graph is back on the rise, after analysts and investors got uber-pessimistic a few weeks ago. The stock market cottoned onto the better economic picture with little hesitation.
Source: Business Insider, July 1, 2011.
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