TELL stock investors that the economy is influenced by activity on the sun and they would never believe you. That doesn’t stop plenty of them responding to other equally irrelevant information, though – and this tendency may be a factor driving current market volatility.
Economists use the term “sunspots” to refer to news or events that really shouldn’t move markets but can if enough people believe they will. The name comes from a claim in the 1870s by English economist William Stanley Jevons that sunspot activity might be the cause of economic cycles.
Newspaper articles can be sunspots. “The Wall Street…
