Bullish Day Traders Roiled By Tech Selloff
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What is the main topic discussed in this episode?
I'm J.R.
Whalen in New York. The current market volatility is causing concern among a typically bullish group of traders. And no, we're not talking about the fat cats on Wall Street. We'll have those details in a moment, but first, these money items you should know. The percentage of individuals receiving tax audits declined for the sixth consecutive year in 2017 to reach the lowest level in 15 years. further showing the effect of budget cuts at the IRS. The agency's lost nearly one-third of its enforcement staffers since the 2010 peak, and the audit rate declined most for high-income households, even though the Treasury Inspector General said over two years ago,
What are day traders reacting to in the recent tech selloff?
Those earners should be an enforcement priority for the IRS. Prices rose in February and annual inflation edged closer to the Federal Reserve's 2 percent target, a sign of strengthening U.S. inflation pressures that could encourage the Fed to continue lifting interest rates this year. The Commerce Department said Thursday its personal consumption expenditures price index rose two-tenths of a percent in February from the prior month. on a seasonally adjusted basis. While Thursday's report offers signs of firming price pressures, inflation is still well below the Fed's 2% target. And America's low-income earners boosted consumer sentiment to a 14-year high this month, while confidence among the nation's highest earning workers fell.
The University of Michigan on Thursday said its consumer sentiment index was 101.4 in March. That's up from February. March's gain from February was largely driven by lower-income households' rising optimism, signaling that the U.S. 's tight labor market, which is pulling workers from the sidelines and pushing up wages in pockets of the country, could be making consumers more optimistic. This is your Money Briefing from The Wall Street Journal. Welcome back, everybody. The almost daily gyrations in the stock market not only capture the headlines, but they cause the most seasoned high rollers on Wall Street to scratch their heads. But it's also giving day traders, a usually bullish set of short-term investors, reason to rethink things as well.
And Wall Street Journal reporter Ben Eisen is here to discuss. So, Ben, a lot of times these day traders are not typically phased by the types of volatility that we're seeing.
Yeah, this is a group of people that basically ride the momentum in the market oftentimes. The momentum in the market has been going up. It's been very strong in tech stocks for most of the bull market, actually, but especially in the last year or so when tech stocks rose a lot. But as you've seen the sell-off deepen in tech stocks over the last couple of days, the sentiment has really started to decline among day traders. And this measure that we looked at, we basically took data from a forum called StockTwits, which is where day traders often post ideas and have discussions and stuff, and a lot of their messages can be classified into bullish or bearish. So it's basically looking at those messages and the share that's bullish versus the share that's bearish, and you've seen that really start to take a dive recently.
And these are traders that have a little bit more internal fortitude than a lot of other people. They can sort of buckle in for the ups and downs. And it's got to be kind of significant that they are being roiled by this.
Yeah, definitely. These are guys that tend to get in and out, you know, often the same day, sometimes within minutes or hours.
These are like guys in the movies we see that trade in and out and make a lot of money. And you wonder, how can I be like him?
Yeah.
Yeah, sometimes like that. Sometimes, you know, sitting in a basement somewhere playing with very little money. But, you know, everyone's different, of course. But, yeah, these guys tend to talk a lot about what they're doing and how they're doing it and looking for little pops or dips in the market. And recently there have been a lot of dips.
So aside from the day traders, what other categories of traders are you seeing?
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