Cause of the crash?

[JamesMuenchen]

Back in March, I highlighted the proposed changes to the Global Industry Classification Standard that would see various whales reclassified and affect a lot of ETFs and trackers

viewtopic.php?p=124488#p124488

The reclassification will impact ETFs that track the information technology, consumer discretionary and telecoms sectors, and could potentially see consumer discretionary stocks such as Netflix, Disney, Comcast and Time Warner, and tech stocks such as Apple, Google, and Facebook, move to the newly created communications services sector.
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The changes will affect ETFs that track information technology stocks such as the iShares S&P 500 Information Technology Sector ETF (IITU LN), which currently has major weights assigned to Apple (16.1%), Google (11.3%) and Facebook (7.8%).
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The changes will take effect after the close of business on 28 September 2018.

I did sell out of IITU before the change, but held on to some individual stocks like Amazon.

Could this change have been the trigger for the slide we have seen? The timing seems to match.

[odysseus2000]

Doubt whether traders and computer algorithms care about such stuff.

They are however, hyper focused on competition to equities and raising rates makes bonds more competitive.

If I wanted a reason for the sell off it would be first the Fed, 2nd something bad happening that hasn't reached the market but the big guys have seen it.


For the moment I am uncertain about the ultimate driver. If there is something bad somewhere we should find out over the next few months.

If not I would revert to the Fed, the general macro environment and that fact that markets have gone up a lot since the last bear market of 2008 and folk might be getting bored with it.

Regards,

[Ashfordian]

The near inverting of the yield curve?

As there is a known correlation of this predicting recessions could this be exposing all those US stocks that are on very high ratings and thus profit is being taken off the table

[monabri]

I thought that it was Trump who triggered the sell off as a result of him declaring increasing tariffs on China ?