Choppy trading activity in the market continued Thursday, with the big-picture trend remaining the same: bonds going down and stocks rising. This inverse correlation used to be a positive one. In other words, stocks and bonds were going up and down in tandem. That has now reversed. But trading volumes have curiously been lower, with Wednesday marking the lowest volume day in a month. Eric Johnston of Cantor Fitzgerald thinks the reason for this is that institutional trading activity is subdued due to low conviction. At the same time, activity among retail traders, corporate buybacks and CTAs (commodity trading advisors) has been higher. CTAs are trend followers — they tend to buy and sell S & P 500 futures. When volatility goes down and prices go up, they are often the buyers. Meanwhile, the rally in Cathie Wood stocks may be starting to fade. Her flagship ARK Innovation fund (ARKK) rallied more than 15% since Federal Reserve Chairman Jerome Powell's press conference on March 16. However, key names in the fund such as Teladoc, Block, Twilio and Roku are down Thursday, while the broader market rallied. ARKK itself traded about 0.2% lower.
Traders at the NYSE, March 8, 2022.
Choppy trading activity in the market continued Thursday, with the big-picture trend remaining the same: bonds going down and stocks rising.