Reality check for the stock market is coming up

Frankfurt Stock Exchange

With the start of the quarterly season, a logic that is often used at the moment is likely to become obsolete.

(Photo: dpa)

Dusseldorf For months, the message on the stock market has been set in stone: bad news is good for the stock market. If the economic data are weaker than expected, prices rise. If there are more unemployed and companies are increasing their salaries more slowly, prices will also rise. Conversely, prices fall when the number of unemployed falls.

This is cynical, because behind the numbers are the fates of people who may be struggling to be able to pay their rent, heat their home or buy the groceries they need. But the cold logic of the market is different: when the economy is weaker and unemployment is higher, the central banks raise their interest rates less sharply or even lower them – and stocks benefit from this.

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