There’s been some hope that perhaps the onset of earnings season might shift investors towards a more micro-focused approach (actually looking at companies), rather than the macro approach (obsessing over every comment from Europe or China).
So far, it seems, that perhaps that’s being borne out. The market is ignoring the China property news which, realistically, shouldn’t be that determinant of US equity prices, and focusing on the story at home, which is good.
Yesterday the Journal ran its piece about the startling and virtually unprecedented correlation among stocks (a natural result of the macro focus).
We’ll be curious if the correlation trade has been top-ticked, to some extent, and if perhaps the start of the earnings season, combined with a clear throttling down of Europe fears (nobody cared at all about the Portugal downgrade, and Greece held a successful T-Bill auction today), will begin the shift a little bit back in the direction of micro.
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