$19 Billion of Stock for Sale and Other Theories on the Selloff
- Selling by asset allocators may be contributing to weakness
- Lines on charts, a delayed Fed reaction are also posited
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From technical selling to technical levels on charts, investors were groping for answers amid the worst equity selloff since early April. Here’s a sampling of responses that were circulating in the market at midday.
One theory on the weakness is that it reflects end-of-quarter adjustments by institutional investors with large holdings in both stocks and bonds. According to this, big asset allocators use the period to balance out holdings, dumping winners and adding to losers. At the moment, that’s bad for equities.