Many people are confused about why the stock market keeps rising. The economy, after all, is in lousy shape. So why does the stock market keep going up and up?

A single headline that appeared the other day on the Yahoo Finance website helps explain the reason. Building on what that headline reveals allows a fuller explanation of this strange market phenomenon.

Here’s the headline: “Weak U.S. data run gives stock a lift.”

What does this headline tell us? And how do comparable headlines and news stories support the thinking that keeps the endless stock price run up going?

When the economic data reported are good, stock prices rise.

When the economic date reported are bad or weak, however (as noted in this headline), then The Fed is expected to maintain or increase its quantitative easing (money printing) which boosts stock prices, so bad or weak data also makes stock prices rise.

Moving on…

When consumer spending increases, stock prices go up.

When consumer spending decreases, however, it’s because gas prices have gone down and consumers can spend their money elsewhere (the market’s thinking), so stock prices go up.

When companies report good earnings, stock prices go up.

When companies report bad earnings, but these earnings beat analyst expectations, stock prices go up.

When consumer confidence remains below benchmarks distinguishing between good from bad overall confidence, stock prices go up if confidence increases a bit, even though the overall sentiment remains very negative.

When job numbers are good, stock prices go up.

When job numbers are bad, but nonetheless in line with a slowly improving economy (as defined by the market), stock prices go up.

When foreign markets go up, our domestic stock market follows along.

When foreign markets go down, analysts here “look beyond” these downturns and our stock prices rise.

When not a single piece of news looks good, or can even be spun into something that looks good, stock prices briefly decline but then surge upwards as investors pour in to take advantage of the “stock buying opportunity.”

This kind of thing explains the stock market’s endless rise. Every piece of news is interpreted as a reason for it to rise. And we don’t have to worry that this is some kind of bubble either. Because after all, this time, honestly, no kidding, all the best and brightest minds agree — this time it really, Really, REALLY is different.

(Murder At Bernstein’s, a novel by the author of this piece, is now available from Amazon.)