Bank of America warns of new price swings
A group of Bank of America strategists issued a recommendation for the investors. The experts recommend to prepare for the coming steep price swings.
According to the note, the market fragility has grown because of the high-frequency traders, who often tend to shut down machines because of the rising stress. This, in turn, damages liquidity, which also suffers from trend-chasing behaviour, which now dominates the market.
The strategists claim, that the uncertainty is likely to stay for a long time. Even if the vaccine will be developed faster, the markets will remain turbulent because of the scale of the crisis.
The pandemic saw some large market swings. The S&P 500 index saw the fastest change from the record rally to a correction in history. Both European VStoxx and Cboe Volatility Index are falling at a record pace as well.