Data Overload Spurs Markets - But Why?

Annaly Salvos submits:

Bank of Canada Governor Mark Carney delivered a speech yesterday in Ontario that contained two observations that we think are certainly true:

• “Insights from financial markets are somewhat fleeting at the moment. A broad range of asset prices from the Canadian dollar to S&P 500 futures to European sovereign spreads are unusually correlated and volatile.”
• “In the current environment, the macro dominates the idiosyncratic.”

Uncertainty may abound over the future of the US economy, but that didn’t stop the equity market from having one of the best months on record in September. The SPX rose 8.9%, while the 10-year Treasury ended the month basically where it began. The past few days have featured a slew of data to help investors in their attempts to divine the direction of the economy. Right now, the expectations for third quarter GDP growth are exactly where the second quarter came in: +1.7%.

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