Financial markets’ performance on any given day is documented by hard data. Stock indexes rise or fall by objectively determined percentages. Even so, your takeaway from the day’s action can depend on which newspaper you read.
For example, you would have formed very different impressions of what happened on Thursday, April 18, 2024, depending on which of these two headlines you saw:
“S&P Extends Slide as Bond Yields Rise”—Wall Street Journal
“Wall Street Snaps Four-Day Losing Streak”—Financial Times
Was April 18 a good day or a bad day? Perhaps neither, judging by yet another take:
“Wall Street Is Mixed as Bonds Tick Higher on Strong Data”—New York Times
Financial reporters’ daily recaps go beyond the overall market direction by highlighting noteworthy price moves within the averages. Here’s what the Associated Press, the source of the New York Times’s article, highlighted in order to provide further insight into the market action:
The Wall Street Journal’s staff evidently didn’t believe those 12.2% and 18% gains provided important insight into the day’s activity. The Journal mentioned four significant movers, only one of which, Alaska Air, was among those named by the AP/Times. As for the FT, it focused on the disparate performance of the “benchmark S&P 500,” “tech-heavy Nasdaq Composite,” S&P financials index, and small-cap-oriented Russell 2000. Its customary table of the day’s best and worst performers included Snap-On, which the Journal also highlighted.
One might at least expect unanimity in the reporting of changes in the yields on Treasury bonds. Yet here are the reported moves in the benchmark ten-year issue:
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- Associated Press/New York Times: 4.59% to 4.63%
- Wall Street Journal: 4.584% to 4.646%
- Financial Times: Up by 0.05 percentage points, i.e., from 4.59%, to 4.64%
Note that after rounding to two decimal places, the closing yields were reported as 4.63%, 4.65%, and 4.64%, respectively. If only it were possible to arbitrage the competing newspapers’ nonequivalent quotes! For what it’s worth, ICE Indices’ two-decimal-place numbers agreed with the FT’s reported rise from 4.59% to 4.64%.
Accounting for the Varying Accounts
None of the foregoing is meant to imply that these respected publications were engaging in spin, a charge frequently leveled against the media. More innocent explanations are available.
Consider, for example, the Financial Times’s account of Wall Street snapping a losing streak, in contrast to the Wall Street Journal’s report of a continuation of the previous slide. Close reading of the FT’s market wrap-up reveals that the S&P 500 was up by 0.4% “by early afternoon in New York.” Consequently, according to the salmon-colored business daily, “US stocks were on track to finish higher” (italics added) shortly before the end of the daily session. Inspection of Bloomberg data reveals that as late as 3:50 pm the S&P 500 was above the previous day’s close, only to dip below it by the time trading concluded at 4:00 pm.
Incidentally, the question of which way “the market” went on Friday, April 19, 2024 was complicated by a divergence between two well-known indexes. The S&P 500 dropped by 0.9%, while the Dow Jones Industrial Average—in bygone days considered synonymous with the U.S. stock market—rose by 0.6%. The Saturday editions of all three newspapers cited herein dwelt mainly on the cumulative decline of the past week or more. Only the Wall Street Journal mentioned the Dow’s gain in its stock summary for April 19. (The Financial Times, reporting as of early afternoon, put the S&P 500’s gain at 0.8% rather than 0.9%).
None of the news organizations mentioned in this post sought to slant the facts. Your understanding of April 18’s market action, however, depended to some extent on which source you consulted. That outcome underscores the importance of being a skillful consumer of financial news. If you’re interested in adding to your existing proficiency, check out this review of ten common pitfalls: CFA Blog – Top 10 Avoidable Distractions
