Chicago Fed Sees Risk From High-Speed Trading in Stock Market
The re-emergence of the scary Dow 1929 stock chart meme, which overlays stocks before 1929 with the recent market, reflected some of those worries. While the same chart of the Dow Jones Industrial Average /quotes/zigman/627449/realtime DJIA +0.79% adjusted for http://www.todayhotstocks.com percent returns filters out a lot of the scary aspects , making it look less likely another 1929 crash is the works, the chart has become a poster child for doomsayers noting the next big drop is around the corner. So many people have talked about expecting a correction and havent had one, their position is increasingly untenable and they turn to a position that gives them validation, said Mark Luschini, chief investment strategist at Janney Montgomery Scott. The last time stocks across the board fell more than 10% was back in the summer of 2011 during the debt-ceiling debacle and subsequent S&P downgrade of U.S.
Experts said on the macro front, market participants will closely watch the FY’15 fiscal deficit target, which will determine the size of market borrowing for the next fiscal. “Overall, the near-term trend is showing sell on rallies, and till Nifty closes decisively above 6,100, investors may book profit in rallies. In coming week, 6,100 shall be crucial deciding level in near-term, and the index is likely to witness further buying above this level,” said Rakesh Goyal, senior vice president of Bonanza Portfolio Ltd. Over the last week, the Sensex lost 9.74 points – the third straight weekly drop.
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In a document posted on the Chicago Fed website, senior policy adviser Carol Clark highlighted five questions for policy makers and regulators to consider, including how to oversee trading thats spread across different asset classes around the world and whether rulemakers have adequate technology and systems in place to oversee markets. The factors that have contributed to the adoption of high-speed trading and affected market structure in recent years include competition, technology and regulation, Clark wrote. The unexpected ways in which these dynamic forces are coming together raise a number of important policy issues. The Fed is the latest voice to join the debate over whether the $22 trillion U.S. equity market is organized appropriately. In December, the U.S.
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Last, there is the question of luck. Some countries have resources agricultural, extractive, capital, or intellectual that may confer an advantage compared to other nations. If that advantage is appreciated and already priced in by investors, there can be no expectation of superior investment returns. But if the consensus undervalues those resources, then an astute or lucky investor may outperform. In the 20th century, resource-rich countries like the U.S., Canada, Sweden, or Australia prospered.