Machines take the blame as U.S. stock market sells off

Trevor Hunnicutt | October 12, 2018

Machines take the blame as U.S. stock market sells off
Investors searching for perpetrators and victims in this week’s U.S. stock market selloff pointed to a familiar source: number-crunching fund managers and machines. The benchmark U.S. S&P 500 stock index .SPX marked its biggest one-day fall since February and added to those losses on Thursday. The carnage followed a debt market selloff this month driven by expectations that U.S. inflation will be strong enough to warrant further rises in interest rates the Federal Reserve, but not all investors think the selling made sense. “Warren Buffett made his fortune by buying low and selling high,” said the billionaire hedge fund manager Leon Cooperman, founder of Omega Advisors Inc. “Machines buy strength and sell weakness and aggravate the moves. There was no reason for that kind of a move yesterday. “The order of events, rising bond yields followed by a stock market selloff, recalled a similar event in February and also put focus on a host of mechanical investment strategies from risk-parity funds to commodity trading advisers (CTAs) and trend followers.

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Safran held its Capital Markets Day event in London on March 2016 for investors and financial analysts...


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