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"Completely bizarre" stock moves cause traders to scratch



(Bloomberg) – As the turbulent December on the stock markets comes to an end, traders and investors can agree: these are not ordinary times, especially for this season.

It's "completely bizarre," says Stephen Innes, head of Asia Pacific at Oanda Corp. " It's unbelievable how damaging the markets are when the mood wears off. "

Innes benefited from some winning investments and snatched blue-chip stocks whose valuations dropped off the selloff in December, but he largely keeps his money on the sidelines. Like many other traders in Asia, he has events in the USA watched from afar and was amazed at what he sees.

The S & P 500 Index recorded its biggest uplift since 2010, the largest since 2009, on Thursday, the day after the end of the brand In fact, the measure fell by nearly 10 percent in December alone. "I'm on the golf course," says Innes, as he reacts, "just like I spent most of the week."

Mark Matthews, Asia Research Director Bank Julius Baer & Co. in Singapore says two "golden rules" have been broken: First, December has had the highest average monthly profits since 1945, he says be the worst of the year. Second, the S & P 500 has never slumped since the 1970s, when earnings growth was more than 10 percent, according to him. But as a long-time investor, Matthews is planning to give it a try. "I stay invested in good and bad times," he says. "Not being long-term is like betting against the house in a casino."

In Sydney, Sean Fenton is scratching his head. "This is certainly unusual for this season," says Tribeca Investment Partners' portfolio manager on market movements. "You see people go on vacation and close the business, not the volatility, so to speak." Fenton says he is on the alert, like Matthews, betting that the US economy is robust and the selloff is bottoming out. For this time of year he is "probably a bit more market-oriented," he says, but that does not mean he has reasons for the steps. "Trying to explain the short-term movements in the markets is an exercise in futility because it's generally random," he says.

In Tokyo, Hajime Sakai simply keeps away from trading. Mito Securities Co.'s Chief Fund Manager admits the whole thing surprised him. "I can not really say that I've dealt with it," he says. "I was not able to answer." This is partly due to the time span between the decision of the trade and the execution of the trade, which often takes place one or two days later. In such choppy markets, this gap makes trading almost impossible. "We are increasingly confronted with situations where the price at the time of execution is completely different from the decision," he says.

Hold Cash

"We have never seen the US market decline in this magnitude and speed for the past eight to nine years," says Margaret Yang, market analyst at CMC Markets in Singapore Yang expects to overweight cash for the time being and expects volatility to continue until the end of the year, until investors get a clearer picture of the holiday season, but in the longer term she does not know if this will be a "healthy correction", As the low valuations of the S & P 500 are attractive to investors and earnings are ahead of expectations or will mark the end of the 10-year bull run, one thing is for sure: "The recent move is definitely unusual," she says In South Korea, Lee Dong-jun agrees. "The head of DB Asset Management's global investment team in Seoul has come as far as possible from Ma He only took care of existing investments and stayed away from new business. "That's not normal," he says about the market turmoil. "The mood of investors is very bad." And while "we do not believe that this kind of huge volatility will continue," he says, "we do not think it's a good idea to trade stocks in such a market." [19659011] To contact the reporters on this story: Abhishek Vishnoi in Singapore at [email protected]; Min Jeong Lee in Tokyo at [email protected]; Matthew Burgess in Sydney at [email protected]

To contact the editors Responsible for this story: Divya Balji at [email protected], Tom Redmond

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