12.07.18
Wild Markets Pinch Trading, Vexing Investors
by: Corrie Driebusch; Daniel Kruger; Michael Wursthorn
The markets' wild swings are rattling investors who worry that ongoing volatility could crimp liquidity among stocks, bonds, and other assets. An imbalance of buyers and sellers disrupted trading among bonds and other assets in Thursday's session, according to traders, spurring larger-than-average price fluctuations. The diminished liquidity is making it harder to buy and sell stocks, bonds, and oil futures and exacerbating swings in the year’s final weeks, when markets are typically more subdued. Multiple exchange-traded funds (ETFs) that track bonds have lately been trading at discounts to the net asset value of their bondholdings. That is considered an unusual development because any ETF may be exchanged at any time for a basket of its component securities, a mechanism that aims to keep market values in alignment.
Read the full article on Wall Street Journal