The Stock Market Does Not Measure Today's Headlines, But Instead, It Knows Tomorrow's News

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The US Debt Ceiling and a potential Greek Default will not derail this bull market, states Don Hays.

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"The stock market measures tomorrow's news, not today's headlines." - Don Hays

According to Don Hays, founder and chairman of Hays Advisory, the bull market is still alive and strong. On Monday, Hays wrote to clients that despite all of the negative headlines that everyone has seen and heard about throughout the current economic recovery, the stock market has continued to gain significant ground.

Whether it’s the peril of the Euro, the potential defaults by debt-ridden European nations (especially Greece), or the US debt ceiling deadline, the market seems to have almost ignored such headlines as the S&P 500 has nearly doubled since the bottom that it made in March of 2009 following the financial crisis. Yet, we haven’t only seen negative headlines over this period. There have also been many signs of real growth in the economy, as visible in economic indicators such as durable goods orders.

In essence, Hays suggests, “The stock market measures tomorrow’s news, not today’s headlines.” In fact, he believes that the sideways action that we’ve seen in the stock market so far this year is simply the pricing in of the recent “economic soft patch” news (along with other current economic data points both positive and negative), and now that a bottom seems to have formed following the most recent correction, the stock market seems to be pricing in more positive news from the future.

Hays believes that the stock market is the best barometer known to mankind, and he plans to continue to listen to its message as the bull market continues.

About Hays Advisory, LLC
Hays Advisory produces stock market and economic analysis for individual and institutional clients that is both widely followed and internationally recognized. Subscribers may gain insight from our disciplined, unemotional approach and a better understanding of the factors we believe are driving long-term market trends.

Based in Brentwood, Tennessee, Hays Advisory invests for the long-term. Founded in 1999, this independent, employee-owned investment firm manages portfolios for both individual and institutional clients.

Hays Advisory’s strategy is to take advantage of opportunities at major market turning points. Because market expectations are often wrong at or near these turning points, emotional decision-making can lead to investor underperformance. Using a tactical asset allocation model, Hays’ strategy attempts to remove emotion from the investment process.


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