Today 2 controversial news came with one with almost no consequences, and the other - with serious consequences on markets. First the unemployment data showed worse than expectations situation and this pressed the markets down for a while. But after that the pending sales of existing homes marked a 4,1% rise and this was a powerful kick for the markets up. In fact historically the unemployment data has always been much more important indicator and with stronger influence that the existing homes pending sales. But today the homes beat the missing jobs. So why this happened this way?

The answer is very simple. Statistical news is only a trigger and not a basic reason for market moves. A trigger without a reason leads to nothing. So at the moment there is no real reason of markets to go down, as all the markets are over flooded with liquidity. Low interest rates and generous bond buying from central banks supplied enough money to feed a long term bull-scenario on almost all markets. These inflationary bubbles are just waiting a trigger to rush up. So it doesn't matter the real economy is not so good (jobless claims). It matters that much cash must be invested somewhere and the existing homes sales is a good trigger for a boom... :))) In is a little ironical as the property market is bubbled by the same reason that pumps up all other markets - low interest rates and enormous money-print. So with this news of a good existing homes sales, in fact the money-print self-creates a trigger for a general bubble in all markets... :)

Dobri
April 26th 2012

P.S. On the next day - April 27th, a much more important news of U.S. GDP growth lower than expectations led to almost no effect. Generally a worse GDP data should press the markets down. But nothing like this happened, confirming the thesis above. Only a trigger with no fundamentals means nothing...