Why Bad News Hasn’t Kept the Stock Market Down

When it comes to economic data, the market isn’t always looking for “good news.”

Most recently, weaker labor market data sent the major indexes to fresh highs because the numbers created a path for the Federal Reserve to lower interest rates. Rosenberg Research’s Mehmet Beceren argues that’s part of a character shift in the S&P 500.

“There is an interesting tension in today’s stock market, now highly concentrated in mega-cap global Tech stocks,” Beceren writes. “The profit growth cycle of the benchmark indices has decoupled from the U.S. economic cycle, yet at the same time, the market’s interest rate sensitivity — so-called equity duration — has increased considerably. This creates new challenges in the assessment of risks and opportunities for asset allocators trying to align portfolio decisions based on macro indicators.”