Watching the market with Ron Insana

by Trish Ireland

The Internet may provide breaking news within minutes of an event, but for cutting-edge news, start watching the stock market.

Ron Insana, senior analyst for CNBC, spoke for the William O’Neil Guest Lecture on Monday. He said journalists report events after the fact, but “markets move seemingly in advance to events.”

The financial market showed when the invasion would happen during the first Gulf War in 1991. Every prediction journalists made at the time proved false, but the price of oil forecasted each event.

Despite his conversational tone and jokes about his former hairpiece and CNN anchor Lou Dobbs, his message to the audience of business majors, journalism majors, and faculty provided insight to newsgathering.

Insana called upon journalists to stop imposing their points of view.

“Use the market, as opposed to just watch the market,” he said.

Every stock fluctuation won’t indicate a major event, but long-term shifts precede financial and geo-political events. However, business journalists should not try to move the market. Instead, they need to report information about companies from multiple sides.

According to Insana, business people and journalists will have to stay on their toes because the market is changing faster and faster, thanks to technology.

“The question is how to pick the right horse to ride the digital wave,” he said

Technology like HDTV, wireless Internet, and Apple’s iPod have revolutionized the market and will continue to do so. He said the wireless iPod will transform current business models.

Insana also offered tips to predict the outcome for the 2008 presidential election. If the market is up before elections, expect an incumbent victory because presidents boost the market in their third year to garner support and approval.