Reading Minds and Markets: Minimizing Risk and Maximizing Returns in a Volatile Global Marketplace

8. The Second Factor: The Economy—Headwind or Tailwind for Stocks?

On a hot day in early September 2007, traders and investors showed up for work early in the morning. They waited, with some trepidation, for the Labor Department’s early morning announcement that would tell the world how many new jobs were created or how many jobs had been lost in August. It’s a ritual that occurs on the first Friday of every month in the year, but on this day, economists were looking for signs that emerging woes in the real estate industry had spilled over into the labor market. They still expected that overall businesses had managed to add 100,000 or so employees to their collective payroll the previous month. Not so. Instead, when the report was released at ...