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This week the Dow vaulted back over 13,000 — while Gross Domestic Product is just treading water in the shallow end of the pool. Our New York bureau chief Heidi Moore and Sudeep Reddy of the Wall Street Journal talk about the week’s biggest financial news with host Tess Vigeland.
On two contrary economic indicators: GDP’s down to 1.5 percent, but the Dow’s up above 13,000. What gives?
Heidi Moore: It’s actually really interesting. It’s great that the Dow’s at 13,000. But as we know, the market is into the economy and I don’t really see what the market has to be so smug about anyway because things are not good. Corporate earnings are not good. The fact that we have such a slow rate of growth is concerning because it looks like it’s going to continue.
On who this is good news for, if anyone?
Sudeep Reddy: It’s good news for anyone who’s looking for things to stay exactly the way they are, which nobody should want that — but there are people who do, of course. What’s really terrifying about this divergence between the stock market and the underlying economy is that it sets us up for bigger problems down the road, bigger disappointments. Because what we saw in the economic data today was a weakening in the areas that really matter the most.
For more from the interview, including whether there’s reason to care about Europe this week outside of the Olympics, click on the play button above.
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