JPMORGAN: The defining feature of the last stock-market meltdown was a symptom of a bigger shift that could trigger crashes for years to come

almost back at all-time highs, the vicious sell-off that occurred in December is fading further into the rearview mirror.analysis of the 20% correction and subsequent recovery demonstrated that low market liquidity was a major cause of the market's moves — a dynamic the firm says will persist going forward.

"All of our paradigm shifts became apparent during the December correction and the sharp V-shaped rally back in January,"She added:"The liquidity shock occurred with a 20% US equity market correction in the fourth quarter, populist sentiment increased after the November midterm elections, the Fed pivoted by January and the US/China came to understand that they need some sort of détente, with a trade agreement potentially announced later this month.

They include the rise of systematic trading strategies that are programmed to react to certain market environments without the intervention of human market makers. Another paradigm-shifting development has been the $3 trillion transfer of assets from active managers to passive instruments since the Great Recession. Notably, there are fewer value investors to hunt for bargains during market crashes, and this hampers the ability of the market to recover from big drawdowns, Kolanovic said.Even though US Treasuries form the largest bond market in the world, there's evidence under the surface that liquidity is constrained.

Canada Canada Latest News, Canada Canada Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Lyft stock is tumbling after a lukewarm market debut last weekLyft's market debut offers something of a gut check for Uber, Slack and Pinterest. I've used Lyft once in five years. I've used Uber 11 times in the past month. waitingforUber
Source: CNBC - 🏆 12. / 72 Read more »

China's stock market is up 27% this year, giving it new leverage in trade talksWhen the U.S. escalated the trade war with China last September, China's economy was struggling and its stock market was in a deep slide. I thought China was losing. 🤷‍♂️🤔 Does that mean China can get more out of a deal and not have to settle for just anything The stockholders are told what to do by Beijing. When they want it to go up, it goes up. No leverage here.
Source: CNBC - 🏆 12. / 72 Read more »

Investors shun stock funds amid the market's best start to a year since 1998While stocks are on track to post their best quarter since 2009 and best start to a year in more than two decades, equity funds have failed to attract new money. Gonna lose their ass. republicans and a republican president caused the great depression ! same policies going on now ! anyone remember ? Does anyone take into account the market bottomed around the 1st of the year? Those are smart investors. On the other hand smart traders will be short.
Source: CNBC - 🏆 12. / 72 Read more »

There are signs that the 10-year bull market for stocks is ending, Jim O'Neill saysFormer Goldman Sachs Asset Management Chairman Jim O'Neill says volatility is doing something it hasn't done for 10 years. Ah Jim O'Neill presided over the WORST investment record of any company. Did anything he supervise make any money?
Source: CNBC - 🏆 12. / 72 Read more »

Stock market trades at session low with energy sector, Boeing's stock weighingThe stock market traded at session lows with about two hours left in regular trade Wednesday afternoon. There appeared to be no direct catalyst for the...
Source: MarketWatch - 🏆 3. / 97 Read more »