It’s encouraging to see that one mainstream media outlet questioning the recent market melt-up which wasn’t just notable for the lack of volatility, but also a severe lack of volume. The new normal seems to be ‘No vol and no volume’, although we saw a bit of a regime shift today, before the normal reversal.
The WSJ noted today that ‘Stocks continue to hit record highs, yet those pushing them there are trading less and less. The number of stocks and exchange-traded products changing hands in the U. S. and Europe has fallen steadily in recent months as ultralow volatility, a lack of market-moving news and the rising popularity of passive investment funds have kept many investors on the sidelines.’
The chart below of trading volume in both regions is ugly, to say the least, especially in Europe where it’s the lowest in five years. Aggregated trading volume for NYSE, NYSE American, NYSE Arca and the NASDAQ this month is reported to be down 12% versus the average for the year and 22% below last year’s average. It’s become so bad that even ETF trading is 8.5% below last year.
This post was published at Zero Hedge on Oct 19, 2017.