"Eighty percent of daily volume in the U.S. is done by machines, so what you get is a lack of focus on earnings, a lack of focus on outlooks and you just get short-term movements based on very specific data that is released every day and that creates noise," Guy De Blonay, fund manager at Jupiter Asset Management, told.
De Blonay's comments come after U.S. stocks fell sharply on Tuesday, on the back of concerns regarding the bond market.
Some analysts believe that the sell-off was triggered because of the way the complex machines operate. They are programed to sell when the odds of future market losses increase.
Many believe that the different sell-off episodes seen throughout 2018 were caused by these machines, as they act on immediate data releases, without taking the time to digest them as humans would.
Tonight, this situation was repeated again, which forced CME to make a few 10-second breaks and limit the admission of market orders, forcing algo treders to stop trading.
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