Stock markets around the world react to every news report like pigeons in a park. Huddled together in one strutting mass they move slowly around, clockwise, until the smallest cue strikes them. Suddenly, there is a small panic and the flock races counter-clockwise in a feathered flurry. They stop, and then the heads all bob clockwise again for a moment. After a few scratching moments a blind panic sets in and boom! Counter-clockwise with a few desperate flaps of wings.
You may think that pigeons are not rational enough to run a financial system. But if you want to find something in the news to explain the market’s behavior, you might as well consult the mooching birds at the nearest park. Everything that stock markets are reacting to has been in the news for a very long time – they suddenly decided, for their own reasons, to start taking it seriously.
As today starts, the movement is staying very counter-clockwise. The pigeons seem to have a purpose.