Futures are flat pre-market on Wednesday after a sharp jump in the S&P 500 Index (^GSPC) Tuesday which erased Monday's losses. It's a tale full of sound and fury signifying boredom.
The truth is most major market participants are semi-checked out for the year. Those who aren't are throwing trading hail-Mary's at assets like gold and oil (CLH15.NYM) which are trading like micro-cap biotech stocks, rather than ancient commodities.
Not that there still aren't things to discuss. In the next 72 hours we're going to get a fistful of employment reports, same store sales from several retailers and almost certainly something horrible related to hacking, or cyber-crime or a Kardashian.
For investors the risk at this point in the year is less a fundamental change than an emotional reaction. This sounds fluffy but it matters. Most investors underperform not out of stupidity but because they can't control their emotions. In short, we sell when we're afraid and chase when we're greedy.
During slow news periods the media skew is going to be towards negative reporting. You can see the bias in obvious ways when you look at the ludicrous estimate that Christmas sales dropped 11% which was reported as grim truth on Monday. A more subtle example comes from the way strong auto sales were attributed not to a decent economy, but to subprime auto loans and stupid consumers.
You can blame we in the punditry game for this but we're simply trying to keep our jobs. The truth is negative stories do much better. A study from McGill University this year confirmed that regardless of what the audience says, they engage with the negative. Blame your cavemen ancestors who had strong incentives to assume every rustling bush contained a deadly predator.
Negative headlines outnumber positives by about 17:1 by some accounts. I'm not asking you to change your reading behavior, but just keep your bias in mind before you start bailing out of stocks at the slightest headwind.
The truth is the economy isn't perfect but it's growing slowly. Christmas will be fine. Anyone telling you otherwise is either clickbaiting or simply wrong.