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When markets and data diverge

Investors need to remember that the impact of new information doesn’t depend on the facts themselves, but on how they change the story.

Michael McCarthyContributor

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From late March to early May, sharemarkets around the globe rallied strongly. Index gains exceeded 40 per cent in many cases. The US Nasdaq 100 index hit an all-time high. At the same time, macro data and company reports painted a grim picture of economic damage and high uncertainty.

How can sharemarket performance diverge so radically from the empirical evidence, and what can investors do about it?

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    Original URL: https://www.afr.com/wealth/personal-finance/when-markets-and-data-diverge-20200615-p552vl