We suspect that we’re not the only ones who are dismayed about the recent wild flip flops in the stock market these last weeks, especially in the latter part of December. Following several days of extraordinary volatility, on Monday, December 24, according to the Wall Street Journal, there was the worst ever sell-off for that pre-holiday date.
That was followed by Wednesday’s 1,086 point climb – the biggest one-day gain on record. And this was followed by an 871 point swing on Thursday. The Dow Jones Industrial average changed direction 19 times on Friday ending the day down 0.3 percent, making December its worst month since February 2009.
There are perhaps non-sinister reasons for all this. The Federal Reserve’s monetary policy may have played a role, and the economy and trade issues may have contributed as well.
But there are some savvy observers who are suggesting that old-time manipulation by key traders – and maybe even foreign powers – may be in play. They point to the fact that in the last two minutes of trading in 2018, there was a 270-plus point swing in the Dow Jones. And they are suggesting that a systematic investigation is in order, perhaps by the Securities and Exchange Commission or a grand jury convened with subpoena power.
From where we stand, we see serious questions about the fairness and efficiency of the market.