A Stock Market Record and Rising Economic Worry? Wall Street Has a Name for That

Bad news is cheered. Good news makes investors nervous. Welcome to Wall Street.

The S&P 500 rose above 3,000 for the first time in its history on Wednesday, with gains that continued early Thursday.

The most recent jump began after Federal Reserve chair, Jerome Powell, suggested the nation’s central bank was worried about the economy. Just days earlier, strong data on the job market had the opposite effect for stocks.

This counterintuitive reaction to the news is a phenomenon that’s explained by expectations for interest rates. The weakening outlook for the economy means, in all likelihood, borrowing costs are coming down — and in the right circumstances, this can be good for stocks.

If that all sounds familiar, there is good reason. Those same conditions were in place for much of 2012 to 2015, when the S&P 500 rose nearly 45 percent.

That climb earned itself a nickname, the TINA market. It stands for There Is No Alternative, which simply means that because central banks around the world were holding rates so low investors had little choice but to buy American stocks.

Lower interest rates made returns on government bonds around the world less appealing and drove investors to seek returns in the stock market. At the same time, the United States economy was performing better than much of the rest of the world, and American stocks were seen as less speculative bets than those in other countries. These are more or less the same circumstances investors face today.

Here’s a look at why the return of the TINA

Keep reading this article on The New York Times Business.

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