Obviously, investors are expecting the worst, and that usually sets the market up for a positive surprise. If that were to happen this week, the best hope lies in Fed Chairman Alan Greenspan's address to Congress on Tuesday. For instance, in politics there have been many times when a strongman has wrested power from an incompetent government in a third world country, turned around the economy and lowered crime. The nation ultimately intervenes, but it drags its feet knowing that while democracy is served, the people are probably better off with the dictator. And so in this case, the status quo may have been a better way of distributing corporate news.
Most investors react negatively when trying to digest the corporate news on their own.
Before, whispers among professionals cushioned the blow, and often bad news was already disseminated on the Street. Therefore, the reactions were muted. Though the financials have held their own and the drug stocks are fine, neither act like the safe havens they once were. Instead, investors have decided they like the non-sexy appeal of retailers and supermarket stocks. The reality is that the safest haven now is cash.