What’s to blame for the latest stock crash
While many are scratching their heads after such a good January, the week’s crash may be overdue: here’s why
Tokyo — Not widely welcomed, but arguably overdue? The sharp sell-off in stocks that started last week and gathered steam this week lacked a specific trigger — unlike the last time US shares fell this much, which came in the wake of the US losing its AAA sovereign rating at S&P Global Ratings in 2011. "People are waking up shocked — January was a very good month and suddenly you hit February and it’s all flipped," said Kerry Craig, a Melbourne-based global market strategist at JPMorgan Asset Management, which oversees about $2-trillion. "I had a flurry of e-mails from clients" wondering "what on Earth has happened", he said by phone. As with plane crashes, the experts are pointing to a confluence of factors, from concerns over the path of US Federal Reserve interest-rate increases to a rapid unwinding of trades predicated on continued low volatility in markets. A selection of factors follows. Surge in yields Longer dated US treasuries stubbornly refused to budge much after the Fed k...
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