Displaying items by tag: dow

(New York)

Everyone knows it, but in case you were under a rock, the Dow had its worst day in six years yesterday. At one point the index fell around 1,600 points before recovering to close down 1,175 points, or nearly 5%. The S&P 500 fell 4.1% to close down 7.8% since last Monday. One commentator argues that the market is now in “full price discovery mode”, with no technical supports or trend lines holding whatsoever.

FINSUM: We are five years since the Taper Tantrum, and now it is actually happening. Is this the start of the huge sting everyone has been predicting for years?

(New York)

The markets had a wild day yesterday. Big loss at open, almost back to even, then a really steep fall, and finally, a little rally to close. Bloomberg says that the trading activity has all the telltale signs of algorithms wreaking havoc. For 15 minutes just after 3 pm, the volume of sell orders was so quick and so voluminous that nothing alive could have possibly executed them. The market tanked, plunging to a 1,597-point loss. Interestingly, the involvement of algorithms might help to assuage some fears, as brokers are using that dimension as a way to calm human investors that this was not an all out emotional panic, but rather technology gone wild.

FINSUM: So we know they are deeply ingrained and certainly going nowhere, but why, in principle, are non-human agents allowed to transact in markets? Market-making firms would say they add liquidity, but they certainly exacerbate, or even cause panic too.