Here Is What Triggered Today’s Sudden Stock Liquidation
by Tyler Durden
ZeroHedge.com
Tue, 12/04/2018
Earlier this morning, Nomura’s Charlie McElligott noted something which in retrospect was quite prophetic: the cross-asset strategist highlighted that his Risk Parity model showed that the market’s most important strategy is in “de-risking” mode as the economic cycle turns sharply:
In a positioning confirmation / “nod” then to this growth- and inflation- slowdown scenario, it is finally worth noting that we see our Risk Parity model having added enormous notional size in global Government Bonds (USTs and JGBs) over the past month, against very large selling of global Equities and Credit.
The implication – and confirmation – judging by today’s market, is that the trade was a long way from finished, looking at the recent risk parity deleveraging in equities…
But while ongoing (relatively slow) risk parity deleveraging may explain the pressure on the market over the past month, the reason for the sharp waterfall in US stocks just after 12pm ET…
The Rest…HERE
