Whether you call it a crash or a correction, questions remain on the events of the down trading day of August 24 this summer. Along with the specter of new regulation and the new wave market volatility, the impact of that single trading day looms large in the minds of panelists and attendees at the 82nd Annual Market Structure Conference of the Security Traders Association that is taking place in Washington DC this week.
Panelists on sessions expressed concern over the events of last August when the stock market in the US dropped more than 1,000 points early in the trading day before rebounding the following day. While business news pundits pointed to fears over a cooling Chinese economy and the possibility of an interest rate hike from the U.S. Federal Reserve, a set of STA panelists were awaiting the data and analysis before passing judgement.
We are waiting to the reports about the liquidity event and we need to see why it happened. There is going to be many reports and findings about that day and we should learn a lot then, said a panelist. (STA media policy asks that journalists not identify panelists without their permission.)
At an STA luncheon, a member of a leading trading venue said that the events of August 24th and the subsequent volatility are having an impact on new initial public offerings. New clients are a little more skittish these days and we are hearing a lot of concern when it comes to new IPOs, said the market maker representative.
When asked when he thinks this market may settle down, he simply shrugged.
In other STA news, SEC commissioner Kara Stein reiterated the the regulators call for greater transparency into the nations more than 40 dark pools.
“The current environment sometimes feels closer to a massive computer game than a system dedicated to allocating capital efficiently and serving investors,” Stein said in prepared remarks to the Securities Traders Association in Washington D.C.
Stein added that the SEC should “adopt dramatic reforms to bring transparency to dark venues. She added that this includes making the rules that govern the various platforms public and to make more execution and order data available to the public.
