The share market failure last week over fears the coronavirus could lead to a recession was the worst since the 2008 financial crisis; however, market experts said Monday trade was principally orderly because of robust market infrastructure.
The S&P500 dipped 11.5% last week before staging a partial bounce Monday on hopes central banks will seek to cushion the economic impact of the outbreak via rate cuts.
On Friday alone, the market turned over 19.35 billion shares, the second-highest quantity on record behind 19.76 billion on October 10, 2008, stated Larry Tabb, founder of research and consultancy agency Tabb Group. In terms of value, under $1 trillion traded arms, a record total for a single day, he stated.
On the retail side, TD Ameritrade stated trading volume last week by its 11 million clients was 1.5 times greater than earlier last month, with above-normal activity recorded on the buying as well as selling sides.
The U.S. markets are highly routined, with hundreds of thousands of messages processed each second, and much of last week’s shift was computer-driven, led by skilled traders, stated Ben Carlson, director of institutional asset supervision at Ritholtz Wealth Management.
He stated he didn’t see any significant flash crash-type price hikes or main inconsistencies between exchange-traded fund prices and the prices of their underlying constituents.
Investors ought to expect to see more sharp selling if the coronavirus outbreak in New York; however, markets would likely continue to work even if the New York Stock Exchange (NYSE) had to close.