The president’s market report

By Felix Salmon
November 29, 2010

One of the silliest yet most ubiquitous things in financial journalism is the daily market report. The Dow did this, the Nasdaq did that, lookee the dollar, or Gold, or the Hang Seng. Invariably a word like “as” or “after” is used to connect the market move to some news item of the day without quite coming out and saying that there’s a causal relationship.

For individual investors, who should probably check up on the value of their investments no more than twice a year (and even once every two or three years is fine), there’s no reason at all to be blasted with hundreds of these reports a year. They overemphasize noisy intraday moves, and tend to miss out on the signals of big and genuinely important market trends.

All that said, however, if you feel the need to read a daily market report, I know exactly which daily market report it should be. Here’s Brady Dennis, reporting on the activities of Treasury’s markets operation:

A team member also puts together a one-page summary of the day’s activities as part of the daily economic briefing for Obama.

“It’s the hardest document we write, because it’s got to be smart, and it’s got to be in depth, but it can’t be technical,” Pedroni said. “Avoiding getting superficial is the big challenge. Sometimes the weeds have to be there, because the weeds matter.”

Although the environment in some ways resembles a Wall Street trading floor, Pedroni says the staff has an altogether different goal.

“At the end of the day, for us it’s not about profit and loss,” he said. “It’s going to be about good policymaking.”

I’m pretty sure I’ve never seen a copy of this daily markets summary, which is sad—I’d love to see what it looks like, and I can’t think of any good reason why it should be classified. I wonder: could Treasury post it online every day? Maybe even send it out by e-mail to subscribers? I’m sure that the product would be extremely popular on Wall Street and beyond, and help build a fair amount of free goodwill for the White House.


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Even declassifying it after a week or so would be helpful, I can see why they might not want people trading off of White House intelligence (just doesn’t sound right) but I would really like to see how a particular day’s report compares with standard financial reporting.

I’d consider writing a letter to my senator, but I think Julian Assange might be able to get them disclosed quicker.

Posted by JohnCoogan | Report as abusive

“For individual investors, who should probably check up on the value of their investments no more than twice a year (and even once every two or three years is fine)”

…to me this seems like dangerous ground Felix. I’m an investment mangaer and I offer my customers monthly or quarterly statements to go along with their online access. I would rather my customers go with quarterly statements to reduce the costs of mailing statements… but investors should review their results at least quarterly.

If you were to ignor your statements for 2 year periods how would you know when the dow hit 14,000 (a pretty good time to sell) or when it went under 7,000… a pretty good time to buy.

I know your not much for active management but looking at investments only once a year or less seems much to infrequent to me.

Posted by y2kurtus | Report as abusive

If you want to be completely passive, then checking once every 2-3 years (and adjusting the allocations at that time) is sufficient. Such an investor would be entirely invested in index funds of various types and would make no attempt to differentiate “good time to buy” from “good time to sell”.

For those who want to take a more active approach, I would recommend reviewing their *investments* at least quarterly. Their *results* are probably not the best thing to be focused on, since they are necessarily water under the bridge.

Posted by TFF | Report as abusive

I agree with Coogan. It wouldn’t make a lot of sense to release them immediately. They’d have market-moving potential and might contribute to volatility. But wait a week for each day’s release, and (1) those problems should be resolved, while (2) creating a healthy new level of policy transparency.

Way too logical, though. It will never happen.

Posted by Christofurio | Report as abusive

In an uncanny bout of synchrocity, tonight I heard the obligatory “dow up/down #, NASDAQ etc.” blurb at the end of the NPR news update while driving home and wondered whether that was even still the most relevant number to be reporting for daily updates on the economy.

Was that cemented as a practice before there were a wide variety of other financial instruments? Or do they serve other purposes (akin to a weather report for people’s retirement portfolio)?

A lot of the suggestions to improve financial reporting are rather difficult, but fixing this seems like a really easy win.

Posted by gregbrown | Report as abusive