Loading ...If there is anything today’s violent reversal in the market demonstrated, where this morning’s inexplicable levitation (well, maybe explicable now that “terrible news is great news” again) was smashed with stocks plummeting once Trump tweeted that the China trade war ceasefire is dead, and the US would impose “a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country”, it is that algos, quants, and systematic funds remain the marginal price setters of the US stock market.
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Indeed, as Bloomberg’s Andrew Cinko said when commenting on today’s early morning levitation, it “looks more like it’s being driven by ETF flows or perhaps quant- or multi-strategy firms. That’s money that tends to go out as quickly as it came in, leaving the S&P vulnerable to a reversal as the bid dissipates.” Ironically, just minutes later we got definitive proof of just how fast the passive, or algo money, flees in the milliseconds following Trump’s tweet.