The S&P 500 fell on Monday because tech stocks went down. Tech stocks went down because they were worth less at the close than they were at the open. This is called price discovery. You're supposed to pretend it means something.
CNBC will interview Scott Kirby on Tuesday morning. He runs United Airlines. The network thinks this will move markets. They think a man who charges you $40 to pick your own seat has alpha to share about equity valuations. They think his thoughts on Q3 guidance will help you time your SPY calls. They're wrong, but they sold the ad space already so he's coming on anyway.
Here's what moves markets: buyers and sellers. That's it. Not CEO interviews. Not earnings whispers. Not some guy on television explaining why jet fuel costs went up. Just people clicking buttons. Sometimes more people click buy. Sometimes more people click sell. The one with more clicks wins. This is the entire market structure.
Retail traders will watch the Kirby interview. They'll hear him say something about load factors or operational efficiency. They'll think they've uncovered an edge. They'll open their Robinhood app and buy calls on DAL because they can't remember which airline ticker is which. Then they'll watch those calls expire worthless on Friday and blame market manipulation instead of their own stunning inability to read a calendar.
Tech stocks tumbled. That's the headline's word, tumbled, like they fell down some stairs. They didn't tumble. They repriced lower. The close printed under the open. Gravity had nothing to do with it.
Tuesday's big stock stories won't move the market in the next trading session. Tuesday's big stock stories will fill airtime between pharmaceutical commercials while the market does whatever it was going to do anyway. Scott Kirby could announce he's replacing every plane with a hot air balloon and SPY would still close within fifty cents of where it opened.
Photo by Nick Chong on Unsplash
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