Did summer holidays make this week’s market turmoil worse?

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A global stock sell-off in the dog days of August disrupted getaways and left junior traders to deal with the crisis alone

Market convulsions that briefly wiped more than $1tn from Japan’s main stock index and sent shares in megacap tech groups plummeting have been blamed on a cocktail of factors, from the unwinding of the yen carry trade to fears of an impending US recession. But for those managing the rout, the crisis was shaped by a seasonal workplace quirk: summer holidays.

The group said in a note to clients this week that buy and sell orders in the Treasury market were running at 30 per cent of the usual depth. Illiquidity “is even more extreme” in US equities, they added. “The summer effect is big,” said Rich Rosenblum, co-chief executive of crypto market maker GSR, who added that listings for new alt-coins are at multiyear lows. “If we were to have 10 listings this week I’d call some of my guys and girls back from summer to help. But we have no listings.

 

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