Putting the Markets in Perspective

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It’s been a tough year so far for the economy and the stock market. Inflation is high and interest rates are rising. Cryptocurrency prices fell; The S&P 500 recently approached a bear market, the sign of an industry that is down 20 percent or more from its recent high. Investments, in the short term at least, have been trending lower overall, leaving many readers concerned that the US is on the brink of another recession.

Jeff Sommer, who covers markets, finance and economics in his strategies column for the New York Times, tries to put the highs and lows into perspective. In an interview, he discussed what it was like to present a market report that caused many investors to panic. This interview has been edited.

How did you start covering the stock market?

Earlier in my career, I came to The Times as an editor at National Desk and then became an editor in the Business Desk. I found it interesting that I went back to school. I started writing the strategies column sometime during the 2008 financial crisis.

Have you seen any trends that changed the way you cover the markets?

The role of the Federal Reserve has become completely centralized. There is an old saying: Don’t fight the Fed, which means that if the Fed puts money into the economy, it will cause the stock market to go up. And if the Fed tightens, as it does now, that will lead to a downturn. Starting with the financial crisis around 2008, the role of the Federal Reserve has been huge.

Are there other directions? I know social media is starting to play a bigger role.

The so-called meme shares are a direct outgrowth of that. Robert Schiller, the economist at Yale University who studied this and won a Nobel Prize, had the idea for the spread of “novels”. This has always been true, but with social media it has become like wildfire. I think that’s one of the potential issues now.

What is the task of the strategies column?

The overall goal is to educate people in the market and allay any concerns they may have. I am trying to give a perspective to people who may need to stay in the stock market for a very long time if they are hoping to save money. But on the other hand, they are very weak. How do you manage that? I care more about the millions of people who are in this situation.

We are still in a pandemic. There is a geopolitical crisis related to nuclear power. The US relationship with China is currently questionable. And the United States has many internal political divisions that are well documented elsewhere in the Times. Add it all up, you can become very pessimistic. I believe it is an act of faith to continue investing for the long term. I try to point out what is known and what is not.

How do readers’ comments affect your reports?

I’ve had reader feedback for years – at the moment we’re actively suggesting that people write. In the past 10 days, I’ve received maybe 250 direct questions from different people. I don’t necessarily know what people know and what they don’t know; I have to constantly be reminded that there are new generations, and that’s a beautiful thing.

Lots of comments ask me to explain it more simply. The more you do this, the more you try to split things up: what’s the logic here? What do I suppose? I’m trying to explain what this assumption is and see if it makes sense.

I am fully aware of the fact that this is the New York Times. People trust the Times. Many people trust me. I don’t want to let anyone down.

What would you do if you were saving your whole life and facing this right now – how long would it be? If you’ve read a couple of clips I’ve done recently, you’ve tried to write there very carefully, don’t invest in the stock market at all if you need the money.

As a journalist, I have different roles. If I make straight news stories that look relentlessly grim, I try to get back fairly quickly with a column that puts them in perspective. In the column, I am allowed to present a perspective that is primarily based on facts. But as I said, some believe that the world will go on, that the financial system will hold together, and that markets will eventually rise.