, Columnist
Why Markets Don’t Seem to Care If the Economy Stinks
So many of the most battered industries don’t matter much because of the way stock indexes are structured.
Does it even register with the stock market?
Photographer: OLIVIER DOULIERY/AFPThis article is for subscribers only.
The stock market has been on a tear, yet the economy is in the dumps. So why do so many people believe -- undoubtedly incorrectly -- that the stock market has decoupled from reality?
The economy many people experience, while bleak, is local, personal and, for the most part, either not publicly traded or plays only a small part in the stock market’s moves. To explain why these personal experiences have so little effect on equity markets, we must look more closely at the market role of the weakest industry sectors.