We've had a lot of good news on the economy in the past week: the consumer confidence numbers were way up, there was some positive data from the housing industry, etc. But the stock markets basically shrugged all that off. Both the Dow Jones average and the S&P 500 inched around a bit the past few days but basically look like they'll end the week close to where they started.
Shouldn't the markets be showing a little more enthusiasm for these numbers? There was an interesting column on the investing Web site Seeking Alpha making the case that the market has become saturated with good news. "The bottom line," writes the author, Mitul Kotecha, "is that so much recovery news is built in the prices that the continuing run of better-than-forecast data is having only a limited impact."
Remember, the stock market is a leading indicator of the recovery. That means that by the time the recession is ending - which may well be right around now - stocks will have already absorbed that good news. Stocks, unlike the job and housing markets, are forward-looking, so it's not surprising that their reaction to the beginning of the recovery might be a little meh.
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