FX Trading – Bad News: In or Not-Yet-In?

What’s the story? Is bad news priced into the markets? More specifically, is the crummy potential for first quarter US earnings season priced into markets?

Alcoa kicks things off today and clearly the expectations for the season are dismal. About somewhere just south of a 40% contraction in overall earnings is expected in companies’ first-quarter showing.

Considering the labor situation (among other things) it’s clear that corporate health is still on the skids. Stocks, however, have rallied strongly over the last month, recovering from big-time lows.