The Merval, Argentina’s benchmark equity index, soared 22 percent the day after the recent vote. Markets had been pricing in big electoral gains for the Peronist parties, only for Javier Milei’s market liberal Liberty Advances party to reveal unexpected strength.
The market surge in Argentina is a reminder that equities don’t just rally, nor do they correct or “crash.” They don’t because equity markets are relentlessly pricing knowns. It’s a reminder of what can’t be said enough: big market moves in either direction are an effect of new information reaching investors that force a rethink of equity prices that are always and everywhere a look into the future.
This basic, far from novel truth about equities and markets in general was sadly missing from Andrew Ross Sorkin’s new book, 1929: Inside the Greatest Crash In Wall Street History – And How It Shattered a Nation. The author’s choice to omit the meaning of market rallies and corrections, or for that matter a failure to understand their meaning, rendered 1929 much less than the near unanimously positive reviews of the book so far indicate.
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