The Wall of Worry
The old saying on Wall Street is that the market climbs a wall of worry to reach new highs. Yesterday, the S&P 500 index, the benchmark for the “market” at large, hit a new all time high. And true to form, there’s plenty to worry about.
To wit: Brexit, tariffs, impeachment, elections, a trade war with China, a looming recession, a wider conflict in the Middle East, North Korean nukes, California wildfires, a fear the Fed will raise rates, a fear that the Fed won’t raise rates, and, of course, an errant tweet that could cause all the other dominoes to fall.
So, why does the market continue to climb? In a word, great earnings. So far, for the quarter that ended on September 30, most companies have reported expected or better than expected earnings. And that, pretty much, is all the market needs.
But remember, a climb is slow and steady, while a fall happens fast and ends with a thud.
Find further reading about this record-breaking day, check out the US Markets column at CNBC.
David R. Evanson is a financial journalist in Philadelphia.