Almost all corporate media outlets have corporate parents with publicly traded stock – which means they have a vested (read deeply conflicted) interest in keeping Americans content to be invested in the stock market.
By Pam Martens and Russ Martens of Wall Street on Parade.
On January 26, 2018 the Dow Jones Industrial Average set a new record high of 26,616.71. Despite setting new highs multiple times thereafter, the moves were so negligible on a percentage basis that the reality is that the stock market has been a real dog over the past year and a half. This past Friday, the Dow closed at 26,797.46. That’s a meager 180.75 points, or less than a one percent move, in 19 months. That’s not exactly the stuff that retirement dreams are built on.
But if you’re a typical American who has to rely on headlines or TV sound bites to tell you what’s going on in the market because you’re too busy working long hours, running the kids to dentist appointments and soccer games, doing grocery shopping and laundry on the weekends, then you may have been fooled by corporate media into thinking the stock market has been doing great. Here’s why.
Every major newspaper in America has been running headlines all year touting the news that the stock market is setting new highs. Unfortunately, corporate media rarely explains what this new high means in percentage terms on an annualized basis. That means that corporate media is leaving out the most essential measure of how your money is working for you in the stock market.
Here’s a sampling:
On July 3, 2019, USA Today reported that “Dow, U.S. stocks hit record highs on rate cut hopes ahead of July 4th.” There is nothing in the article that gives the reader what this new high means as a percentage return year over year, year-to-date, or for any period of time.
On April 23, 2019 CNN blasted the headline: “US stocks hit new record highs.” The reporting went like this:
“US stocks climbed past their all-time highs on Tuesday, as stocks continued to rally from their December lows.
“The S&P 500 reached 2933.68 points, breaking through the historical closing high of 2,930.75 points that it set in September. The Nasdaq nearly hit 8121 points, beating the 8,110 point all-time best close it hit in August.”
At this point, it would have only taken a few seconds of calculations to provide the reader with what these meager point moves meant in terms of an annualized percentage return. But the article doesn’t provide it.
On June 20, 2019, the New York Times cheerfully reported “Stocks Just Hit a Record, Thanks to the Fed.” Not only does the Times not provide an annualized percentage return figure but it seriously clouds the issue by reporting this:
“The market is now up more than 7 percent this month, a rally led by shares of materials, technology and consumer discretionary companies.
“June’s bounce has repaired all the damage done during an ugly May, a slump set off in part when talks between China and the United States publicly fell apart in a storm of tweets, recriminations and the imposition of new tariffs.”
Reporting a 7 percent return in one month makes the market sound like it is back to the races and folks not in the market might miss out on the next big move. There is simply no reason for a major newspaper not to be providing annual returns or year-to-date returns when it blares in its headlines that the stock market just set a new high.
USA Today is owned by Gannett, a publicly traded stock. CNN’s parent company is Times Warner, also a publicly traded stock. The New York Times is also a publicly-traded company. Almost all corporate media outlets have corporate parents with publicly traded stock – which means they have a vested (read deeply conflicted) interest in keeping Americans content to be invested in the stock market…