Charles Platiau/Reuters
- Strange market logic shows why good news for the economy can be bad news for stocks.
- Some investors want to see growth and employment falter so the Fed cuts interest rates.
- But a healthy economy is good for stocks over time as it fuels spending, hiring, and investing.
Good news for the economy can be bad news for stocks, thanks to a weird quirk of market logic.
Positive economic developments such as strong GDP growth, robust employment gains, and mild inflation tend to drive stocks higher in the long run. Yet their implications for interest rates have mattered more to stocks in recent months. Here's why.