Friday, July 18, 2014

Turn Down the Volume

Even as the stock market continues its upward climb, trading volume has been surprisingly low. In the second quarter, equity trading volumes fell by more than 8 percent from the first quarter, to an average of 6.03 billion shares a day, according to data from Credit Suisse. That makes it the slowest second quarter for stock trading since 2006.

We've seen that slowdown have an effect on banking revenues. On Wednesday, Bank of America reported that its second-quarter revenue from equity sales and trading fell 14 percent from a year ago. J.P. Morgan Chase reported a 10 percent drop in equity markets revenue and Citigroup's dropped 26 percent.

The low volume is one reason we've seen so little volatility in the market this year. That's the subject of the new article posted on the Echelon Wealth Strategies Web site: how that volatility is measured, and what it means for the individual investor. You can find the full article here.

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