Gas prices are well above $4, ceasefire negotiations are on ice and airlines are warning that they’re running out of jet fuel. So, it sure seems odd that stocks are at record highs.
Blame CNN. No, really. Not for world events or the machinations of the markets, but for the perception that those two things are connected.
CNN (and the media as a whole) has forever linked current events with the performance of the stock market — it’s right there in a little “Dow” bug at the bottom of the screen during live news coverage.
That’s why we often view the stock market as a mirror. But the market isn’t a mirror; it’s a prediction engine.
Stock fluctuations are barometers for how a vast array of information — robust profit performance, a CEO gets sick, a competitor builds a better product, AI threatens an entire line of business — changes the perceived value of a particular company’s shares and its long-term earnings potential.
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