Media Moves

Understanding and covering a turbulent stock market

October 26, 2015

Posted by Lauren Thomas

“The market is like a living creature; as soon as you’re ready to publish a story saying the market is going up, it goes down,” Jeff Sutherland, U.S. equities team leader for Bloomberg, said during a training call hosted by the Society of American Business Editors and Writers on Monday.

Some people argue that publications should “do away with daily market coverage” because it changes from one minute to the next, Sutherland said. But it’s his job to find a reason behind the market madness and explain that story to readers.

With the financial markets taking a bumpy ride recently, reacting to investors’ concerns about the Chinese economy and growing uncertainty over interest rates, stocks have undoubtedly suffered. During SABEW’s training call this week, panelists offered insight into what’s behind the recent market volatility and predicted where things are headed. Panelists also gave listeners advice on how to cover financial markets and find local angles on market swings, putting the news into perspective for regional readers and investors.

The panel included moderator Allen Wastler, a former managing editor of CNBC.com; Jack Ablin, executive vice president and chief investment officer with BMO Private Bank; Gail MarksJarvis, a financial columnist with the Chicago Tribune, and Sutherland, leader of the U.S. equities team at Bloomberg.

MarksJarvis began the panel’s discussion by saying that business journalists shouldn’t be trusted entirely to predict the future of stocks because the market behaves differently every day, and frankly, “market timers have poor records.”

Gail MarksJarvis“I’m not sure you could buy a cup of coffee with that advice,” she said.

When writing a market report that will relate to individual investors and readers, MarksJarvis advises journalists to first “focus on the drivers that day in the market,” such as housing data, GDP results and other economic indicators that send stock prices higher or lower. Then “look to see if large stocks are doing well versus small stocks, and look at other financial markets around the world.”

Beyond that, readers aren’t interested as much in daily market movement, but they want to know what to do with their money, MarksJarvis added. “They want to know: Do I get in or get out?”

Ablin chimed in on how he monitors financial markets, adding, “The market is a daily opinion poll on how investors think about certain things. What doesn’t move the market is just as important as what does move the market. It’s something worth noting what investors are shrugging off, too.”

At Bloomberg, Sutherland said writers have a long list of “must-haves” to include in market movement stories, but sometimes those data points can be “overwhelming” to readers.

“We are trying to not get ourselves tied down by numbers because you can overwhelm a reader with a laundry list of data points, and we need to cut through the clutter and let the top of our stories give the clearest impression of what’s happening,” Sutherland said.

As a business journalist, you have to make sure your story “makes sense,” and you don’t want to get things wrong by writing that the market is reacting “because of this” when that isn’t what’s going on, he said. “It’s a balancing act to make sure you don’t over attribute any market movement to something that really doesn’t have a big impact.”

Sutherland and his team constantly monitor the Dow components, leading indices and various other charts to find causation for market movement throughout the day. He said that it’s most important for Bloomberg to publish headlines about market movement immediately for Wall Street readers and then “interpretation comes a little bit later.” He explained, “we come back, fill in that story, and by the time the market closes we have a story to tell to the everyday reader on Main Street.”

MarksJarvis agreed with Sutherland, having learned to “cope with the strange market” rather than being bogged down by the data and false causation herself.

“It’s critical to blend both the economic picture and the action of the markets; show people how the economy drives the market and how the market drives the economy,” she said. Offering insight on where she sees the market by the end of the year, MarksJarvis predicted, “I think this year the stock market will rise into the end of year because people think it will, and that’s really what drives it.”

Ablin added that at BMO he predicts “a slow and steady recovery” with some incremental “plusses and minuses” coming from overseas. “We have reduced risk now, and the economic backdrop appears to be okay,” laying the way for a solid recovery despite some “crazy” market movements, he said.

When determining how “crazy” the market is, Ablin said he measures five metrics: valuation, the economic backdrop, liquidity, investor psychology and momentum.

“Every day in the market is crazy, but it’s fun and fascinating,” Sutherland added.

SABEW conducts these training calls every month, and an archived version of the call will be made available here.

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