Hello friends of Project HOPE, Good morning everyone. Today I want to comment on a topic that is always present in the markets, but sometimes goes unnoticed: expectations and how they influence financial movements.
The market is unpredictable, we know that. But one thing is certain: it always reacts. And often, it's not so much about what actually happens, but rather what people expected to happen. In other words, the simple fact that something is anticipated can cause prices to rise, fall, or remain stable. Economic data, a central bank decision, a company's results... everything is analyzed with a magnifying glass, and the important thing is not just the news itself, but whether it was better or worse than expected.
But if instead of rising 0.25%, they rise 0.50%, there is a strong impact because expectations were different. The same thing happens with employment, inflation, or corporate earnings data. If Apple makes more money than expected, its stock rises. If it makes less, it falls. And if it earns exactly what was expected, sometimes it doesn't budge at all.
That makes the market a reflection of emotions, not just numbers. It's driven by fear, euphoria, uncertainty, and, above all, surprise. Sometimes, even when things go wrong—but not as bad as feared—the market reacts positively. It's not logical, but that's how it works.
So the next time you see something go up or down sharply, think about this: Did something new really happen, or did it just not go as everyone expected? I'll leave you with that reflection. Have a nice day.
