Friday, August 19, 2011

BAML's "Morning Market Tidbits"

"We are a strong believer in the view that market sell-offs stop when investors stop glaring at their Bloomberg screens." Here the BAML economists hint at the (somewhat obvious) fact that consistent negative news flow leads to selling in the market. Unfortunately, bleak economic reports from multiple continents will cause investors to remain glued to their terminals. Psychological expectations play a crucial role in periods of heightened market volatility.

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