Trading at the NYSE is Sleepy, Until Just Before the Close
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What headlines and market stories open this Money Briefing?
Your Money Briefing. Money and Market Stories from The Wall Street Journal. Welcome. I'm Charlie Turner at The Wall Street Journal in New York. We think of the New York Stock Exchange as a sleepier place due to the rise of electronic trading. But the action really heats up right before the sessions close. We'll find out why in a moment. But first, here are some money items you need to know. The Wall Street Journal's Moneybeat team says consumer appetite for crude will grow faster than expected and offset surging U.S. shale output. The International Energy Agency said that the world's appetite for crude will increase by 1.5 million barrels a day. to reach 99.3 million barrels a day in 2018. That's an upward revision from an IEA forecast a month earlier.
The IEA says concerns about a supply glut have eased thanks to an expected demand increase in industrialized nations including Europe, the U.S., and Japan. Energy companies could be stocks to watch as this surge in demand could limit any falls in the price of oil. Solid Biosciences stock has fallen 60 percent just six weeks after going public, but MoneyBeat says Solid shareholders can't say they weren't warned. Solid, a clinical stage biotech company focused on developing a muscular dystrophy treatment, announced Wednesday evening that regulators had placed its lead clinical trial on hold after a patient receiving treatment was hospitalized. Solid said in a statement that the patient is recovering well.
However, the damage is done to investors. Biotech stocks are inherently risky, but investors buying into the IPO chose to ignore warning signs. Solid had disclosed that regulators had ordered a partial hold on the same clinical trial back in November. A top Solid official quit the company's scientific advisory board over possible safety concerns with the drug.
How is global oil demand revised and what does it mean for energy stocks?
Most importantly, Solid has never completed a clinical trial and is years away from bringing its drug candidates to market. Do you prefer Nike or Adidas? The journal's hurt on the street says it may be time for Nike investors to switch to Adidas. The German-based Adidas has long been dominant in Western Europe, but it's now seeing sharp rises in constant currency sales growth, 27% last year in North America, dwarfing Nike's results. A reason for Adidas' success, according to its CEO... is that Adidas may have been earlier than its peers to exploit the athleisure trend, where activewear has become fashionable. Next up, the biggest trade on the big board is the last one. This is your Money Briefing from The Wall Street Journal.
Welcome back, everyone. The New York Stock Exchange operates each day from 9.30 a.m. to 4 p.m., but the Wall Street Journal says that more than ever, the trading action is compressed in the final minutes of the session. More than a quarter of the trading activity at the NYSE took place last year in the last trade of the day, up sharply over the previous five years. Also last year, according to Credit Suisse, trades at the close accounted for more than 8% of trading volume in S&P 500 stocks, nearly four times what it was back in 2004. Why has the big board's last trade of the day become the biggest trade? Joining us is Wall Street Journal reporter Alexander Osipovich. Alex, let's set this up. Not too long ago, there were thousands of traders on the floor of the New York Stock Exchange, and now the number is in the hundreds.
And I get the impression from your story that during the day, it's pretty much of a ghost town with very little trading.
That's absolutely right. Essentially, as the markets have gone overwhelmingly electronic, there's less of a need for the floor brokers and the floor traders at the NYSE. However, because of certain quirks to the way that the New York Stock Exchange designed its systems, they come out in force for the close of the day, and they suddenly get a lot more active when 4 o'clock approaches.
Alex, is this because of a rise in popularity of index funds whose values depend on prices determined at what's known as the closing auction?
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