Beware the naïve businessman mindset focused purely on ‘business as usual’ that believes there is no financial espionage from within the United States, as shown in the last sentence of this article. It’s always an error. Granted, blame shouldn’t be placed squarely 100% on them, as they were trained for business and not national security or intelligence careers. However, one can tell they don’t read the news outside of the business section.
It started at about noon ET. All the trades occurred in roughly the same time period—roughly noon ET to roughly 12:30 p.m.—and the volume in all the stocks was heavy, in most cases several times daily volume.
It all points to one likely explanation: somebody executed some kind of program.
But what kind of program? And was intentional, or did somebody mess up?
Some stocks (CPB, HRS) dropped; some (ADI, CAT, JOY, HRB) went up; others (CVC) went up fast, then down almost as fast.
Two other points:
1) Most of them recovered to a great extent,so most exhibit at least a partial V-shaped pattern.
2) They do not seem related by sector, or any other obvious metric. True, President Barack Obama was aggressively pushing infrastructure during a news conference at this time, so infrastructure stocks moving (CAT, JOY, TSCO) makes some sense, but that would not account for the moves in other stocks.
As part of this “mis-executed” theory, it is also possible that a hedge fund accidentally started liquidating their portfolio, and then noticed it and reversed. How do you know? Because your profit and loss statement suddenly goes haywire.
Either that, or someone is trying to execute a series of pair trades and have no idea what they are doing. Seems unlikely.
Personally, I think somebody messed up. Professionals do not execute such sloppy trading deliberately.
Full article: Strange stock market trades confuse Wall Street (CNBC)