TRADING ON NERVES OF STEEL THIS SUMMER
Equity traders have been through the mill of late. Markets rebounded sharply from the trough late last year only to see prices battered in the spring by ongoing geopolitical tensions. The month of May was particularly rocky with trade talks between the US and China breaking down yet again and UK Prime Minister Theresa May finally throwing in the leadership towel. Finding liquidity can be even trickier in these turbulent times which is why it is crucial to have venues such as Aquis Exchange consistently offering the deepest of pools.
Performance varied although the direction of travel was south. The MSCI World Index lost 4.1% during May while the emerging markets index dropped 6%. The FTSE 100 was only off 2.4% but the STOXX 600 posted its worst monthly performance in over three years. Meanwhile in the US, the S&P 500 was down almost 7% since its April 30 high with roughly one fifth of all stocks trading below their December 2018 lows.
It is June. It is Summer now, but nerves continue to jangle. This is due to a number of factors, including the G20 summit later this month. US President Donald Trump and Chinese President Xi Jinping have downplayed the chances of resolving their ongoing trade dispute and meanwhile Brexit continues to hang over Europe like an immovable cloud. This is not even to mention the UK domestic political situation that is descending into farce in the opinion of many.
The Federal Reserve has been warning for months that these new trade measures could stymie growth and the message is finally sinking in. The recent events have sparked fears over a US recession may be nigh which helps explain the recent hike in the Vix index — often referred to as the sometimes fear gauge. And we all know that when the US sneezes invariably it is economies of this side of the Atlantic that are prone to catching colds.
Navigating the equity landscape is not always so easy in the good times which is why having a venue like Aquis Exchange is even more important in these uncertain periods. The exchange stands out as the least toxic lit exchange in Europe and the one with the lowest cost of trading. Equally as important is the fact that Aquis Exchange is often the most liquid MTF in the region, offering around 15% of overall pan-European equity liquidity at the best price. These benefits are beginning to be more accurately translated into market share growth for Aquis Exchange. For the month of May, the pan-European platform achieved a record 4.76% market share of continuous trading.
So, traders this Summer can count on Aquis Exchange well as their legendary nerves of steel – all indications are that it is going to be a hairy ride!
By Lynn Strongin Dodds