Founded on 2 September 1843, The Economist is a weekly newspaper and magazine that takes “part in a severe contest between intelligence and ignorance.” Its foundational beliefs include laissez-faire policies, self-sufficiency, and anti-protectionism. It has a reputation for quality journalism and a global outlook with editorial offices in London, Paris, New York, Beijing, Tokyo, and Johannesburg. The Economist is a subscriber-based publication that features both original leading articles and long-form analytical journalism. The magazine includes a wide range of topics, including politics, business, economics, science, technology, and culture. It is also renowned for its data journalism and emphasis on interpretive analysis over original reporting, to both criticism and acclaim.
US-Canadian trade relations are back in the spotlight after President Trump threatened a 35% tariff on all Canadian imports, except those covered by the existing free trade agreement between the two countries. However, investors largely ignored this news, perhaps because many believe that Trump’s threats are simply the opening move in a negotiation and that the current high level of US tariff rates will likely remain in place for some time.
In this week’s issue, we analyze the market reaction to a number of important economic announcements, including the US jobs report, GDP growth, and factory orders. We find that stocks have a relatively muted response to most economic news. In fact, only one of the thirteen stock price responses we study is statistically significant by 4 p.m. and this response is neither large nor positive. By contrast, bond yields respond much more vigorously to economic news.
